NYSE to extend trading on its Arca exchange

The New York Stock Exchanged announced on Friday its plan to extend trading on its Arca exchange to 22 hours a day.

Proposed Arca Trading Windows

Investors can currently trade on the exchange from 4 a.m. to 8 p.m. Eastern Time. The proposed change, which is subject to regulatory approval, would extend trading for 6 hours a day. Trading would be available from 1:30 am to 11:30 pm Eastern Time everyday, except weekends and holidays.

The extended trading window will apply to all U.S.-listed stocks, ETFs, and closed-end funds available on NYSE Arca, which is the largest U.S. exchange by volume for exchange-traded funds (ETFs).

The Impact of Extended Trading

With its extended hours, the NYSE aims to enhance accessibility for global investors by accommodating various time zones. However, extended trading hours can introduce several drawbacks.

One significant concern is lower liquidity, as trading volumes during these periods tend to be lower than during regular hours, leading to wider bid-ask spreads and less efficient pricing.

Additionally, increased volatility may occur, with fewer market participants exacerbating price swings, which can create uncertainty for investors.

There is also the risk of limited participation from retail investors, who may be unaware of or uncomfortable trading during these off-hours, resulting in a market that may not accurately reflect overall investor sentiment.

Operational challenges also arise for exchanges and trading firms as they must ensure that their systems can effectively handle the demands of extended trading hours.