While the growth of overnight trading has empowered individual investors, it also comes with a set of risks and challenges.FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.Technological advancements, changing regulations, and the increased accessibility of financial markets have made it possible for individual traders to access trading platforms 24/7, leading to an explosion in after-hours and overnight trading.The democratization of trading platforms through technology has played a key role in making overnight trading more accessible. Online brokerages and mobile trading apps like Robinhood, Firstrade, E*TRADE and Webull have made it possible for retail traders to trade anytime, anywhere, even in off-market hours. These platforms offer features such as real-time data feeds, algorithmic trading, and fractional shares, which empower individuals to participate in markets that were once reserved for institutional investors.Anthony DenierAnthony Denier, Group President and US CEO of Webull, confirmed that demand for overnight trading is rising among retail investors, as markets have become more globalized and trading platforms offer greater accessibility and investment opportunities.The demand is fueled by retail investors wanting to capitalize on market movements outside of traditional trading hours, such as those driven by geopolitical events, earnings reports, or breaking news, he said. “The flexibility that overnight trading provides is also appealing to retail investors who might have limited availability during traditional trading hours to actively manage their portfolios,” he added.Arguably, the greatest beneficiaries of overnight trading will be retail investors – people who, in the past, may have found the process mysterious or intimidating, Stephen Callahan, Trading Behavior Specialist at Firstrade, told Traders Magazine. “They may have thought that only large institutional investors were able to take advantage of increased volatility or off hours news,” he said. “Over night trading will show the “little guy” that the markets are more fair, and less prone to manipulation,” he added.“Although overnight trading is not new, the recent spike in interest is an extension of life in the twenty-first century,” Callahan said.News cycles are 24/7, sports viewing ( and betting) are no longer solely local, it makes sense that Stock and ETF trading should be offered in extended hours, he said. “Most people have access to market research and stats at their finger tips. Why not take advantage of an event that can move the market in real-time, instead of waiting for the following morning’s open,” he added. According to Callahan, there is no particular demographic responsible for the surge of overnight trading, but at Firstrade we have seen more new accounts opened, and more speculative trading from people under the age of forty. We actively track clients requests and suggestions via phone and e mail, so we’re p
Dom. Dic 22nd, 2024
