London Stock Exchange Considers 24-Hour Trading Model

The London Stock Exchange Group is contemplating a significant shift in its trading hours, potentially moving to a 24-hour trading model. This consideration comes as traditional exchanges face increasing pressure to modernize in response to the growing demand from retail investors and the global rise of crypto-style markets. The group is actively assessing the feasibility of longer trading hours, taking into account both commercial and regulatory aspects, as well as the technological infrastructure required to support continuous trading.

The potential move is driven by the 24/7 nature of cryptocurrency markets, which attract significant trading volumes across different time zones. This has prompted traditional exchanges to re-evaluate their long-standing trading windows. Younger investors, who are accustomed to real-time access via smartphones, are pushing for more flexibility in trading hours. The London Stock Exchange's current trading hours run from 8 am to 4:30 pm, and the group is examining how extended hours would impact trading liquidity, which is currently concentrated during the opening and closing auctions. Additionally, the group is considering how dual-listed companies might be affected and the regulatory implications and cost burdens involved.

Other global exchanges are also moving in a similar direction. In the US, major exchanges such as the New York Stock Exchange, Nasdaq, and Cboe Global Markets have submitted applications to extend their trading hours. These exchanges account for a significant portion of US equity trading. Their efforts follow the provisional approval of 24X, a new exchange designed to operate around the clock. However, final approval for overnight trading has been delayed as regulators seek clarity on the wider market impacts.

While retail investors have embraced after-hours trading, especially on platforms like Robinhood, institutional investors remain cautious. Fund managers have voiced concerns about higher operational costs and reduced liquidity and weaker price discovery outside regular trading hours. In the US, the debate over trading hours has persisted for years, especially among West Coast investors who must contend with a 1 pm market close. By contrast, Asia’s active trading communities and time zone alignment with US overnight hours give round-the-clock trading models greater relevance.

To enhance its global edge after Brexit, London is considering a crypto-inspired trading approach, which could represent a major change. However, its adoption hinges on whether the advantages surpass the regulatory and operational challenges. The London Stock Exchange earns most of its revenue from selling financial data, but its equities business still plays a symbolic and structural role in the City. Despite contributing just 2.7% of LSEG’s first-quarter revenue this year, the exchange remains a key gateway for international capital flowing into British companies. The potential shift to 24-hour trading could position the London Stock Exchange as a leader in the evolving landscape of global financial markets, catering to the demands of a new generation of investors who expect continuous access to trading opportunities.