What happened?
The London Stock Exchange Group is assessing the feasibility of extending trading hours to potentially offer 24-hour trading. This move is in response to the increasing demand for round-the-clock trading options like those seen in cryptocurrency markets. The exchange is exploring both commercial and regulatory aspects, as well as the required technological infrastructure for continuous trading.
Who does this affect?
This potential change would impact a variety of stakeholders including retail and institutional investors, financial professionals, and companies listed on the exchange. Retail investors, particularly younger ones, may benefit from more flexible trading hours. However, institutional investors and fund managers are cautious due to concerns over liquidity and operational costs associated with extended trading hours.
Why does this matter?
If implemented, the shift to 24-hour trading could significantly alter the dynamics of global financial markets, aligning them more closely with cryptocurrency markets that operate around the clock. This could lead to increased competition among traditional exchanges and affect market liquidity and price discovery mechanisms. Such a move might necessitate changes in trading strategies and operational processes for market participants.