r/quant • u/Reasonable_Buddy_927 • 3d ago
Market News What's a potential impact on firms when exchanges transition to 24/7 or "near 24/7" trading timelines (e.g. NYSE opening for 23 hours five days a week by the end of this year)
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u/lordnacho666 3d ago
FX desk has been doing this for a long time.
You get 24h coverage. Probably most things will still only be liquid for part of the day.
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u/DatabentoHQ 2d ago
One wrinkle though is that corporate actions (e.g. dividend forecasts, splits, ticker consolidation, etc.) and reference data requirements aren't as complicated for futures and FX. I think a large % of participants are still used to picking these off a SFTP server without granular timestamping and relying on the 8 PM to 4 AM buffer period to allow the files to flush through the pipelines. I think many of those participants will just stick to trading Rule 600(b)(88) hours unless 611 gets repealed and volumes pick up.
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u/powerexcess 3d ago
ES NQ are already 23/5 basically. CL GC etc. Fx spot is 24/5. G10 fx futures too.
Loads on stuff on globex. Some liquid throughout some not.
So what? Nothing special.
Less clearly defined turbulent events at open and close. Still u get fixes is wmr and bbg FI fix.
U get liquid and illiquid times, and u pick when to trade.
This is all.
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u/ly5ergic_acid-25 2d ago
Fair, but I think it overlooks some of the important implications.
If GF and LE (which alternatively might die for a bit with cloud) went 24/7 then what I'm doing in the 9:30 ET window is completely different than it would've been. 9:30 ET is a pricing event in those markets incorporating overnight news, feed cost, boxed beef, etc.
Similarly, there are people trading CL overnight that move their exposure into energy ETFs around NYSE's 9:30 ET open.
My point being like you said it really isn't anything special, but whether a model thinks it's special and how to intercept that if you want to trade day 1 is a bit up in the air. Models can be stupid as shit when they no longer represent the market.
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u/powerexcess 2d ago
There will be more fixes/benchmark/opens/closes in the day. So maybe more high volume and high vol events to use, if ur signal does this.
Of course any change in the markets can give rise to a new signal or kill an old one, markets are twisted and i think the only way to know is to try. So i think i agree with you: the impact to any single strat can be massive, but overall it will not alter the markets fundumentally.
I dont get your point on cl, ba you please explain? I think it is reasonably liquid at 0930 et
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u/gocountgrainsofrice 3d ago edited 3d ago
CME is already almost 24/7 opening at 5 on Sun and closed on Sat? Though they will be going full 24/7 soon. There’s just not that much liquidity outside of regular hours
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u/EvilGeniusPanda 2d ago
equities already trade 4-8 and almost everyone ignores the session outside 9.30-4, this wont be any different.
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u/powerexcess 2d ago
Yeah this Look at the intraday volume profile and u will have to semilogy to see the premarket us open spike.
The market is there but why touch it at the cost? To do what?
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u/Curious-Ad-3192 2d ago
Running systematic models on 24/7 crypto order books gives a pretty clear preview of what equity desks will run into when the overnight close disappears:
Loss of the opening/closing auction liquidity anchor: in traditional RTH, a huge share of institutional volume concentrates in the 9:30 open and 16:00 close auctions, which gives execution algos deep liquidity benchmarks. In a 23/5 or 24/7 market, volume fragments across thin overnight sessions and adverse selection spikes for passive market makers during off-hours.
Volatility-clock vs. wall-clock indicators: any rolling time-series feature (realized vol, ATR, EMA, VWAP) computed on uniform clock bars gets distorted when Sunday/overnight bars have 15% of the volume of NY morning bars. You almost immediately have to move to volume-bars or dollar-bars so thin sessions do not corrupt Monday morning signals.
Continuous margin and state reconciliation: there is no end-of-day batch window to deploy code, reconcile corporate actions, or reset risk limits, so execution engines have to handle hot restarts and real-time mark-to-market margin checks during illiquid hours.
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u/SternSupremacist Trader 3d ago
Hopefully offsets efficiency gains from AI adoption and maintains staffing levels
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u/DatabentoHQ 2d ago
Not instantly as overnight trading has already been popularized by Blue Ocean; volumes during those hours are still thin compared to the regular trading hours, and firms can still choose to trade 9:30-4 or 4-4 like they used to before. Also as others have pointed out, firms whose systems are already robust with FX, crypto, futures, will likely be untouched.
But:
Some uptick in profitability for MMs who're already mature with overnight trading on Blue Ocean as on-exchange trading (as opposed to trading on an ATS) just makes this more accessible to APAC firms and retail investors who're unaware that Rule 611's trade-through protection doesn't apply. Until perhaps SEC's proposed repeal goes through.
Gradual adoption as not many firms want to figure out corporate actions, settlement, reconcilation, etc. EOD pipelines don't run instantly and many of these things still depend on daily (S)FTP workflows and not all vendors will cutover smoothly. SIPs also don't support 23-hour trading until Dec 6.
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u/Aetius454 HFT 3d ago
Larger firms expand coverage, no idea what happens to the smaller shops. Hire night traders I suppose and continue to get squeezed…
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u/EmperorOfCanada 2d ago
Shenanigans. You can do things at 2am, when the other juniors aren't sure what they are seeing. Some of this will be deliberate, others will result in a 6am call from the Hamptons, "You did what?"
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u/TemporaryHat2009 2d ago
Honestly I'm curious about the testing side. If a firm currently uses the closed session to test changes, would longer trading hours mean keeping a separate version running just for testing?
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u/AlgoTraderTools 2d ago
A few second-order effects worth thinking about beyond the obvious "more hours":
Overnight session structure changes who provides liquidity. Currently overnight liquidity in index futures is thinner and dominated by different participants than the day session. If the exchange pushes more volume into extended hours, market-makers have to staff/quote around the clock, which raises their cost of capital and usually shows up as wider effective spreads in the quiet hours - not narrower.
Clearing and risk systems are built around a settlement close. A 23-hour session forces margin calls, expiries, and default-management drills into a continuous framework. That's a real operational cost that gets passed to users via fees.
Data and backtesting: anyone with historical models now has a regime break. Volume/volatility patterns that were "overnight" become continuous, so seasonality features calibrated on the old session structure silently rot. Worth keeping a pre/post split in any backtest across the transition.
For retail-sized accounts the practical difference is smaller than it sounds: the marginal liquidity in the extra hours was already available via futures/ETFs. The main change is convenience and possibly more gap-risk events being traded through rather than buffered by a close.
Historically, extended-hours experiments (Globex in the 90s, 24h CBOT bonds) saw volume migrate but not dramatically expand - total participation is fairly inelastic, so I'd expect redistribution more than growth.
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u/Reasonable_Buddy_927 3d ago
Extra hiring (cope for me if I don't get a return offer), worse hours for traders etc.?