Following the lead of American stock exchanges, the London Stock Exchange Group (LSEG) is exploring the possibility of launching 24-hour stock trading to meet the growing demand among retail investors for trading outside standard hours.
According to the Financial Times, the bourse operator is considering the practical aspects of increasing its trading hours, including technology and regulatory issues.
Americans Are Already Pushing for Extended-Hours Trading
The London Stock Exchange’s interest in round-the-clock trading came after three major US exchanges—New York Stock Exchange, Nasdaq, and Cboe Global Markets—applied to local regulators to allow extended-hours trading.
The US Securities and Exchange Commission (SEC) has already approved extended-hours trading on the 24X National Exchange, which will begin operations in September. However, trading on the platform will run for 16 hours a day on weekdays.
Read more: 24/7 Derivatives Trading and Perpetual Futures in the US – CFTC Seeks Feedback
Although exchanges do not officially offer extended trading hours, the practice is already popular among retail traders. Almost all brokerage platforms, including Robinhood and others, allow trading beyond standard hours by routing orders to off-exchange venues.
Professional fund managers, however, are still generally cautious about placing orders outside normal trading hours due to added costs and regulatory risks.
In London and across Europe, contracts for differences (CFDs) brokers have been offering extended-hours trading for years. However, those instruments are leveraged derivatives. Another market that helped make 24-hour trading common is cryptocurrencies, which now see large trading volumes from both retail and institutional traders.
Meanwhile, equities trading brought LSEG only 2.7 per cent of its total revenue in the first quarter of this year. The exchange mainly earns by selling financial data to banks, brokers, and other firms.
Can It Save London’s Capital Markets?
The idea of extending trading hours was also raised as interest in the London stock market declined. The bourse has recently seen several listed companies leave, while demand for new public listings has dropped. In Q1, London raised £74.7 million from new listings, compared with £8.9 billion in the US.
Interestingly, IG Group, a CFDs broker listed in London, launched a campaign to revive interest in the city’s capital markets. It is pushing to scrap stamp duty on share transactions and encourage investors to return to local markets.
Following the lead of American stock exchanges, the London Stock Exchange Group (LSEG) is exploring the possibility of launching 24-hour stock trading to meet the growing demand among retail investors for trading outside standard hours.
According to the Financial Times, the bourse operator is considering the practical aspects of increasing its trading hours, including technology and regulatory issues.
Americans Are Already Pushing for Extended-Hours Trading
The London Stock Exchange’s interest in round-the-clock trading came after three major US exchanges—New York Stock Exchange, Nasdaq, and Cboe Global Markets—applied to local regulators to allow extended-hours trading.
The US Securities and Exchange Commission (SEC) has already approved extended-hours trading on the 24X National Exchange, which will begin operations in September. However, trading on the platform will run for 16 hours a day on weekdays.
Read more: 24/7 Derivatives Trading and Perpetual Futures in the US – CFTC Seeks Feedback
Although exchanges do not officially offer extended trading hours, the practice is already popular among retail traders. Almost all brokerage platforms, including Robinhood and others, allow trading beyond standard hours by routing orders to off-exchange venues.
Professional fund managers, however, are still generally cautious about placing orders outside normal trading hours due to added costs and regulatory risks.
In London and across Europe, contracts for differences (CFDs) brokers have been offering extended-hours trading for years. However, those instruments are leveraged derivatives. Another market that helped make 24-hour trading common is cryptocurrencies, which now see large trading volumes from both retail and institutional traders.
Meanwhile, equities trading brought LSEG only 2.7 per cent of its total revenue in the first quarter of this year. The exchange mainly earns by selling financial data to banks, brokers, and other firms.
Can It Save London’s Capital Markets?
The idea of extending trading hours was also raised as interest in the London stock market declined. The bourse has recently seen several listed companies leave, while demand for new public listings has dropped. In Q1, London raised £74.7 million from new listings, compared with £8.9 billion in the US.
Interestingly, IG Group, a CFDs broker listed in London, launched a campaign to revive interest in the city’s capital markets. It is pushing to scrap stamp duty on share transactions and encourage investors to return to local markets.
This post is originally published on FINANCEMAGNATES.
