“Do you want to trade with me tonight?”

Should we regret that Euronext closes its doors for two whole days at Easter? For the Robinhood platform, the future stock market is 24/7 trading! Really?

The Robinhood stock trading platform, very popular with American individuals, recently announced an extension of its hoursallowing the shares to be traded between 7 a.m. and 8 p.m. (US time), an additional four hours per day. And that would only be the first step towards being able to perform futures trading 24 hours a day, 7 days a week! The platform also writes in large on its site: “The future of investing is 24/7”.

According to Robinhood, (young) clients, who discovered the stock market during the confinement, can more difficultly trade their shares when they find their way back to work. So, for all the early risers and night birds, she wants to offer maximum flexibility.

The debate is not really new. About ten years ago, the idea of ​​stock market trading 24 hours a day, 7 days a week was already making headlines. At the time, the American market Nasdaq had announced to open its doors at 4 a.m. (US time) against 7 a.m. previously for its pre-opening phase. In fact, it was for the Nasdaq to compete with its great rival, the New York stock exchange, which was already starting trading on its Arca electronic system at 4 am.

The race for extra long hours was then amplified by the emergence of alternative trading platforms. In the meantime, official exchanges such as Euronext have also abolished several public holidays. Trading, always more trading…

24/7 trading would be the ultimate step. But not sure that it suits the average investor.

This year, the Euronext markets, including the Brussels Stock Exchange, are only closed for three days (these April 15 and 18 for Easter as well as Monday December 26). The abolition of public holidays has not really thrilled professionals forced to work in markets largely deserted by investors.

Normally, liquidity is already concentrated on a few very specific momentsespecially at the opening of the markets. Some professionals had even proposed reducing trading hours, starting later in the morning and ending earlier in the afternoon. A way to increase liquidity, but also to ensure a better balance between private and professional life and also to attract more women in finance.

But the proposal was rejected. And, on the contrary, the german stock exchange just increased the ability to trade stocks by two hours. By ending at 10 p.m., the Deutsche Börse wants to align with the closure of Wall Street.

The risks of enlargement

24/7 trading would be the ultimate step. But not sure that it suits the average investor. Experts point out that trading outside normal hours can be significantly riskier: the flow of information dries up, transactions become rare and price variations can be very large. “It’s like driving a car in complete darkness,” says a specialist.

This would perhaps make the happiness of some speculators who equate the stock market with a kind of casino whose doors must remain constantly open, but is this really the role of a stock market?

So yes, this would perhaps make the happiness of some speculators who liken the stock market to a kind of casino whose doors must always remain open, but is that really the role of a stock exchange?

If platforms wish to extend the hours, it is above all to earn more money and compensate for the drop in commissions in a context of strong competition. Let’s not forget that the official stock exchanges (Euronext, Nasdaq…) and platforms like Robinhood are all listed on the stock exchange. Let’s not forget either that Robinhood sends its stock market orders through a firm like Citadel Securities, which is a high-frequency trading firm. This type of firm swears only by algorithms and reaction speed.

Faced with these high-frequency traders, who already monopolize 50 to 60% of trading in the USA, the individual investor runs the risk of being the turkey of the farce in the event of extended hours. And, let’s face it, there are other more interesting things to do at 11 p.m. or midnight than “play” in the stock market. So to the question “Do you want to trade with me tonight?” (to parody the lyrics of a famous song…), the answer is no.

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