The Times They Are Exchanging
In a world of ever-proliferating and increasingly speedy trading platforms, some exchanges show less hustle than others. But that may be changing.
The rise of electronic trading and electronic communication networks have made many physical trading floors obsolete, even as others redouble their efforts to stay alive. While the New York Stock Exchange and Chicago Board Options Exchange are in continuous motion, the Singapore Exchange (SGX) still has a lunch break.
Why not have quiet time and milk and cookies as well? But now SGX CEO Magnus Bocker is thinking about slashing the 90-minute siesta.
Bocker told conference attendees in Singapore that the lunch break may soon be a thing of the past, according to Channel News Asia.
Mr. Bocker said: “If we were to have continuous trading, that will support our brokers with extra volume of about 10 per cent. So many of the brokers and banks in our market are keen to see how we deal with this. I think it is a little bit too early to talk about implementation, but let us have a dialogue about it.”
In Japan, concerns with competition have led to proposals to cut a midday break and extend trading hours on the Tokyo Stock Exchange, according to Reuters.
Resistance to increasing trading time is suggestive of the resistance to change that has destroyed a variety of markets and businesses over the years. “The Tokyo bourse has considered extending hours in the past only to drop the idea amid opposition from traditional brokers worried about the cost of upgrading systems and hiring extra staff,” Reuters said.
Events like the May 6 flash crash have led some to wonder if the drive for faster electronic trading with less human input is heading us toward more trading debacles.
“The old system of floor traders matching buyers and sellers has been replaced by machines that process trades automatically, speeding the flow of buy and sell orders but also sometimes facilitating the kind of unexplained volatility that sent markets tumbling [on May 6],” said The Salt Lake Tribune.
Indeed, electronic trading systems are vulnerable to a wider variety of interruptions. In 1987, for instance, a squirrel shut down Nasdaq’s quote system for over an hour, according to The New York Times. In 1994, a second SquirrelGate incident turned off the system for about 30 minutes.
It remains unknown whether the same rodent was responsible for both incidents.
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