Hours stock market
With the economies of several countries in a growth phase, this is having a direct effect on the stock markets in these individual countries and around the world. There is unprecedented activity in the major as well as smaller stock markets. With the introduction of online trading and the phenomenon of financial laymen indulging in the stock market, there is a lot of pressure on the infrastructure of stock markets. Time is a big constraint in this matter since there are only 24 hours in a day. The volume of trading activity is outpacing the systems designed to handle it the established way.
Working overtime pays
The phenomenon of hours stock market is also called after-hours stock market. All organized stock markets have pre-fixed work hours during which all financial activity is to be conducted. Trading is not allowed after these timings and it was considered an act of subterfuge and was deemed as illegal. However with the pressure mounting up and not enough facilities in the existing stock market to meet the growing demand, several stock markets have opened up to trading beyond the fixed timings. This is a recent phenomenon and is being met with a lot of opposition from the financial industry.
This practice of buying and selling stock after official trading hours is called after-hours trading. Initially after-hours trading was being done by major institutional players and high end net individuals. In the late 90s the emergence of new Electronic Communication Networks or ECNs, as they are called have changed the rules. This technology has made it possible for smaller individual investors to indulge in stock trading after hours. Individual investors tend to be mostly non-financial professionals who want to try their hand at wealth creation. They work at their own pace and are likely to be intimidated by the professionals working full time. After hours trading gives them the opportunity to understand the process and work as per their limitations. The influx of individual investors is driving the demand for after hours trading among other factors.
After hours trading is riskier than traditional trading done as before. It also affects the stock market in unpredictable ways and introduces a sense of uncertainty in the process. It is also upsetting the apple cart of the established brokers and financial professionals in this field. However it seems to be rising in popularity and stock market administrators are scratching their heads on how to tackle this issue. It seems likely that the emergence of hours trading is going to keep the policy makers up late at night for some time to come.
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