Stock Markets Plan Longer Hours


OFFICIALS of the New York Stock Exchange, American Stock Exchange, and other major exchanges in the United States are putting together elaborate plans for 24-hour trading in stocks, options, and other investments. But experts say full-scale 24-hour trading is still years away. And in the hinterland - where Americans live and work and sometimes buy and sell stocks and bonds - there is little awareness of or even interest in around-the-clock trading, observers say.

``We're hearing nothing about it [24-hour trading] here, other than what we read in the papers. No one is even asking us about it,'' says Joseph Borreyer, who handles investment accounts for the First National Bank of Springfield, in Illinois.

Nor is the apparent lack of interest in Springfield unusual. In downtown Seattle, a broker with Prudential-Bache Securities says, ``There's little interest by investors here in the concept, and nothing has come down to us on it from our parent offices.''

Still, the accelerated rush to 24-hour trading is taking place on at least four levels:

1. The NYSE has said that it will begin limited 24-hour trading later this year. The Big Board plans to have a complete around-the-clock system in place by the end of the decade.

The Big Board is ``being very crafty in the way it is setting up 24-hour trading,'' says Merton Miller, professor of finance with the University of Chicago Graduate School of Business. The first step, Dr. Miller notes, is to provide for ``crossing trades,'' in which the buyer and seller of a stock have already been matched. Such cross trades, he says, are already performed in London.

2. The American Stock Exchange, the Chicago Options Exchange, the Cincinnati Stock Exchange, and Reuters Holdings PLC plan to have night trading under way by 1992.

3. The National Association of Securities Dealers, which maintains the Nasdaq listing system, plans to begin Nasdaq International, a global network, starting in early September. It will provide computer trading of up to 500 stocks during the pre-dawn hours, starting at around 3:30 a.m., New York time.

4. Finally, Reuters and the Chicago Mercantile Exchange hope to have the Globex system for international futures trading under way by this fall.

In fact, 24-hour trading is already here, market experts stress, in the sense that the European, US, and Asian exchanges operate in different time zones. Large institutional players know that if they can't trade a stock in New York because that market has closed, they might do so on the Tokyo exchange.

And that is precisely why the US exchanges are so eager to enter into 24-hour trading, says Professor Miller. The rush to get into all-day and all-night trading, Miller notes, ``is as much defensive,'' related to competing with overseas markets, as geared to expanding the use of new computer-based trading systems.

More than 150 major US stocks, for example, trade in London. Some 70 key US stocks trade in Tokyo. Because of such overseas listings, between 10 and 15 million shares of US stocks are traded overseas daily. US exchanges, such as the NYSE, are eager to recapture that overseas business in US equities, as well as hold on to existing trading business, Miller says.

And if plans by European ventures for 24-trading take off, Miller adds, US exchanges want to be ready to compete.

Market experts note that, despite all the new planning, full-scale all-day and all-night trading by US exchanges is still three years or more away. But even if 24-hour trading were to become operational, it seems unlikely that it would have much impact on the individual investor in the US, says Thomas O'Hara, chairman of the National Association of Investors Corporation in Royal Oak, Mich.

Smaller investors in the US will return to the stock market when they feel conditions are right for investing, not just because of technological changes, says Mr. O'Hara. He says a recent plan by the Big Board to give greater priority to individual transactions, as contrasted with those of big institutional investors, may be more important than 24-hour trading in luring the small investor back to the market.

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