Plans to move the New York Stock
Exchange toward round-the-clock trading by the year 2001 are not
yet written in stone, but the idea is a cornerstone of the Big
Board's aim to be a powerhouse of global trading.
"We have to be flexible, trading equities for 20 to 22
hours a day, if not having a 24-hour day," NYSE chairman
Richard Grasso said in an interview.
Grasso said he has been working toward a vision of a longer
trading day to boost trading in non-U.S. stocks for about three
He has said a possible scenario could involve expanding
trading to start at 5 a.m. Eastern time and run through
The NYSE bell currently rings in the session at 9:30 a.m.
Eastern time and rings again to close trading at 4 p.m.
People close to the exchange said they thought the idea was
still in the early stages, as Grasso tries to read the responses
from the myriad NYSE interest groups affected. The decision
would affect specialists, seatholders, floor traders and big
institutions that trade there.
The hefty costs to staff the NYSE trading floor and the
trading desks at Wall Street brokerages could spark protests,
but Grasso was hoping the potential profit of more trading hours
will make Wall Street warm up to the idea.
"There are some people who don't like it and lots of
problems to be worked out, but I'm sure they will work out
something that's best for the exchange and the industry," said
Mike Newman, who works on the floor for broker A.G. Edwards.
"This is the future of a global exchange."
Potential issues for seatholders include questions about
whether ownership of seats could be split up or partially leased
for early and late shifts.
Any plan would have to be approved by the NYSE board and the
U.S. Securities and Exchange Commission.
"We are still primarily a domestic market," Grasso said
Tuesday at a Wall Street technology conference.
But he hopes that will change.
"Five years from now, it is reasonable to expect that
perhaps as much as 30 to 35 percent of our volume will be from
the great companies that are yet to arrive in our markets,
companies from around the globe," he said.
Grasso said in December it would not be unreasonable to see
three separate trading sessions. Traders would work one of the
three shifts, with time-specific security badges.
The NYSE said it planned to first try an early morning
shift, focusing on European issues, with perhaps as many as 500
Under the planned phase-in, about 500 stocks would first be
traded in an extended period and, if the move were successful,
an evening session for trading non-U.S. stocks would follow.
Provided there was sufficient liquidity, the NYSE would then
also begin trading selected U.S. companies in the early or late
sessions, in addition to their usual trading session.
The late session could face one significant hurdle there
are only about 60 to 70 Asian stocks that trade on the NYSE. But
Grasso said he hopes that as more companies join, with China a
particular growth spot, that could ease.
Grasso said he hopes to open an early session in the second
half of the year 2000, after the millennium Y2K computer
glitch and decimalization of trading are solved.
The early session would take place in the NYSE's planned
trading room for non-U.S. stocks at 30 Broad Street, just a few
feet south of the NYSE's historic facade. The exchange is
currently made up of a maze of interconnected buildings at Broad
and Wall Streets.
U.S. Treasury Secretary Robert Rubin, asked by Reuters
Television about the idea of longer NYSE hours, said he had "no
idea" about how the NYSE proposal would work out but said he
expected longer trading hours in principle.
Meanwhile the NYSE's biggest U.S. rival, the Nasdaq, said it
was also considering later trading.
"We have been discussing the idea of extending our trading
hours with market participants and our board for some time," a
spokesman said. "Our global initiatives with the Stock Exchange
of Hong Kong in Asia and the Deutsche Boerse in Europe carry
with them an interest in eventually extending our trading hours
to reflect the needs of investors around the world."