The stock market is supposed to be for the whole country right? So why do they hours that only make sense for the Eastern time zone? Even for the Eastern time zone, it’s fairly early - stock market opens at 8 am. For those on the West Cost, that translates to 5 am - which is insane. You’d have to be really dedicated to get up that early to trade. Less time to trade = less chance to make (or lose) money.
And before someone says, “stop whining, you’re just too lazy to get up early”… Well yes, I am - the point is this: If I lived on the East Coast, I could be lazy and still trade stocks the whole day - so it is still favoritism.
So why don’t we shift the hours so it starts at 8am PST, that is 11am EST? So the East Coast traders get to sleep in a bit. Not a bad deal. Now everyone gets to be awake during the whole trading session. Sounds like it could work for the whole country - for a change.
Well, the New York Stock exchange has the hours it has because those are business hours in New York City, which is where it, and all those people who work and trade there, are located. The California markets, on the other hand, trade during California business hours. It’s not so much favoritism as it is that the markets are open during the business day. If they were postponed three hours, then they would run from 11-7, which would mean anyone who works there would be really late getting home.
Actually it has less to do with Business hours in New York City in the colloquial sense but more to do with World Trading. New York is the hub of global economic commerse, so it is not east coast biased, like there is some kind of eerie conspiracy that caters to east coasters. Don’t you understand that New York trading regulates more than the rich peoples pockets who live in the Hamptons. NO, NO, NO, IT regulates the balence of economic strength on a global scale. So young grasshopper, either get up at 5 when the trading opens in NYC and like it, or don’t. Either stop bitching about getting up early to trade, or get into something else. One other thing, if your trading or somekind of Broker, why didn’t you know the reason behind the Time trade opens in NYC???
[nitpick]The stock market does not open at 8:00 a.m. Trading hours at the NYSE and Nasdaq/AMEX markets are 9:30 a.m. - 4:00 p.m. ET. In addition, all three markets have off-hours trading for certain types and mixes of securities.[/nitpick]
Count your blessings, Californians. Do you know how much trading on the Eastern markets ruins a New Yorker’s night’s sleep? You’ve got three whole hours of improvement.
[Further nit]The Pacific Stock exchange follows New York hours. It operates from 6:30am to 1:30 pm.[/further nit]
Why? Well, most of the large institutional traders are still in the East. Also, it’s nice to let the late-staying Londoners have a crack at trading. The west coast follows east coast hours because that’s when stocks are active, and because companies need some time when their stocks are closed to release news, etc.
But mostly, I think the hours are just tradition. It used to take an hour and a half to set up trading in the morning, so the NYSE opens at 9:30. It used to take an hour and a half to do the paperwork at the end of the day, so it closes at 4:00. (It also used to close for lunch, and on Wednesdays for paperwork purposes. Would that those traditions would come back!)
If it’s any consolation, most of the traders I know on the west coast kind of like communting without traffic and having a chance to sneak in nine holes after work.
Well, OK, so I didn’t know the opening hours. I assumed 8 - I’ve never tested the assumption by trying to trade anything at 5:00 am PST - I’m always asleep.
Whether New York is the center of global economic commerce or not is besides the point. Is it a stock exchange of interest to only New Yorkers, or is it of equal interest to the rest of the country? If it’s of equal interest to the rest of the country, have it at some reasonable hours, please. I’d say it’s more important to have the East and West Coast on the same footing than to worry about the affect of the hours on other countries.
The rest of the country? Try the rest of the world. There was a time during the late '80s when the order flow from Japan equalled that from west-coast U.S. accounts.
And we can’t stay open all the time (although there is a misguided attempt afoot to do just that, led by “floorless non-exchange exchanges[sup]1[/sup]” such as Instinet). So whatever hours are set will be in convenient to someone somewhere.
The exchange needs to be open while London is still open in part because so many people sneak their block trades through there, but mostly because that’s where international short-term interest rates are set. An arb can’t set up a position until s/he knows the financing cost, and for that s/he’s gonna want to have as many LIBOR participants awake and trading debt as possible, especially during periods of market turmoil.
[sup]1[/sup] n.b I think Instinet/Island ECN might have got their exchange license at some point. I don’t pay too much attention to such minutia, since my job is all OTC trading anyway.
The NYSE is a private, commercial, profit-making entity that responds to the needs and demands of its customers. Its customers, quite obviously, prefer that trading begin at 9:30 A.M, Eastern Time. That is likely because a larger percentage of its customers (at least in trading volume) are also located on the East coast.
If enough of its customers started clamoring for a later start time to accomodate the West coast, be damned sure that the NYSE would change its hours of operation.
'Course, you could always just start a new exchange, with hours that accomodate you. Plenty of people are doing that, and for one brief shining moment, it looked like NASDAQ was going to knock NYSE of its throne.
Having worked in investment firms in Los Angeles and Chicago, I thought that those cities produced a good percentage of the total trading done in both the stock market and fixed income markets. From my Manhattan perch, I now see that they are DWARFED by the investment activity in metro New York, not to mention the Tri-State area and, even more unmentionable, the rest of the East Coast. The institutional buyers are what count.