[kasey_junk]

Even without the obvious impacts to market makers and the subsequent price increases to investors, this doesn’t help.

Most things trade with price/time priority. This means that first tie breaker is price but second tie breaker on what fills is who had their order into the market first. This means that market makers layer orders in as early as possible, some strategies I’ve seen layering them weeks or months in advance.

So this proposal would add cost to the market without changing anything about the cancel race.

The real solution to this sort of problem (which I don’t believe actually caused this issue) is the same mechanism you put in any request/reply system, rate limits. Most exchanges have them.

[FabHK]

Rate limits, or discrete (in time) instead of continuous trading. An auction every minute or so, for three hours a day. That would be much better.

(When I started in equities in Hong Kong in 2007, the stock market was open for 4 hours a day... 10 to 12:30, two hour lunch break to drink and socialise^W^W^W have important business discussions with clients, then 14:30 to 16:00. Today it's open 5.5 hours a day. EDIT to add: "Reactions from both brokers and the restaurant industry were mixed." (1)

XETRA is open 8.5 hours a day without lunch break, while Frankfurt (FSX) is open 12 hours a day, from 8 to 8. WHY???)

(1) https://en.wikipedia.org/wiki/Hong_Kong_Stock_Exchange#Tradi...

[andylynch]

We have these in Europe & the UK now with MiFID II, on several venues

They are called Periodic, or Frequent Batch, auctions.

This paper & earlier works it's based on were very influential in the design and regulatory framework for these: https://academic.oup.com/qje/article/130/4/1547/1916146

Here's a good intro to them: https://www.fca.org.uk/publications/research/periodic-auctio...

Volumes are small relative to the market as a whole, but execution quality is very good.

[xorcist]

> WHY???

Shouldn't the question be "why not"?

More APIs than not on this planet are considered business critical and doesn't just close. Stock markets are strange as they must be highly available for a few hours and then can be shut down for the day. Imagine if AWS closed every night.

[lukeschlather]

A lot of Amazon retail does close every night. You can put in a request but it won't be fulfilled and shipped until morning. Getting rid of that is a nice idea, but also "instant fulfillment" is not great either without "instant returns." The idea of "instant trading" seems like it can instantly put the system into a bad state with no recourse to fix it.

[xorcist]

AWS doesn't close, which was the example.

The real reason stock markets close is because financial institutions are very interested in keeping it that way. It is lucrative to play pretend stock markets after hours.

(This is a very real question all over Europe right now, and it is interesting to see which institutions talk the loudest about how beneficial a shortening of opening hours would be to just about everyone.)

[logicchains]

>WHY???

The exchange wants to make more money, and people want to be able to trade at whatever time they feel like.

[andylynch]

It turns out they don't; they really want to meet their benchmarks, and trade where the liquidity is.

One data point - 40% of the French stock exchange's turnover is now in the closing auction. Other markets have a similar trend. Longer trading hours mean thinner liquidity throughout the day, and the direction of travel in Europe is strongly towards shorter trading hours.

[ashtonkem]

The answer is also “foreigners”. Regular working hours for a German exchange can produce some pretty brutal trading hours for say, London. When I worked in finance they started serving breakfast at IIRC 5am, since some trading desks started their day then and ended around noon. Expanding those hours can entice foreigners to trade during non-insane local hours.

[chmod775]

> Regular working hours for a German exchange can produce some pretty brutal trading hours for say, London.

Berlin and London time are only off by one hour.

You probably meant the US instead of Berlin/London or there is something going on I'm not aware of?

[ashtonkem]

Yes; I picked the time zones out of thin air, and I chose poorly.

[Rockslide]

Tradegate is even 08-22...