Extended Hours and 24-Hour Trading
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The ECNs have fired the shot that will truly revolutionize how individuals
trade around the world. Beginning with extended hours and
then moving to full 24-hour trading, individual traders will have access to markets around the clock. This will change the statistical
information you have just learned. Over time, as 24-hour trading by
the public becomes more prominent, a new statistical field of information
will be created. Twenty-four-hour trading will mean that
volatility never stops. Investors will be forced by volatility to
become short-term traders. Mutual funds will have far more volatility
than they do today. Open-end mutual funds that calculate the net
asset value (NAV) at the end of the day will show large price fluctuations.
These large swings in NAV will add to investors' anxiety. The
old buy-and-hold strategies of past will create psychological stress.
Investing will actually have more risk than trading because while
you sleep your stock will still be in play. You may go to sleep with
your stock up $5, feeling very good about the gain and sleeping well.
However, in the morning, you may find that your $5 gain has
become a $15 loss due to overnight trading. Investing as you know
it today will be forever altered, and you will tell your grandchildren
about the "old days" when people used to buy and hold. This
change will cause the typical investor to become more actively
involved in the management of his or her capital. Those who simply
cannot handle the psychological stress will seek out a new breed of
professional trader to manage their money, or they'll choose some
other investment vehicles. The genie is out of the bottle. Nothing
can put it back. These economic forces will not be restrained. Like
it or not, 24-hour trading and ENCs are here to stay. They will
become the new economic engines of all industrialized nations,
adding to the liquidity of their markets. The ECNs will enhance the
globalization of markets and bring the world closer together.
International trading will become a reality for the individual as
a result of ECNs and 24-hour trading. Foreign stock traders will be
able to trade U.S. stocks, and U.S. citizens will be able to trade foreign
stocks at any time of the day or night. For the first time in history,
individuals will create world markets, internationally linked by
the ECNs. International and offshore trading capital will flow into
the new 24-hour markets, adding liquidity as well as volatility. In
these new and exciting markets, competition will cause the spreads
on stocks to become smaller and smaller. This is in the public's best
interest. We are already seeing the spreads on stocks becoming smaller on both the NYSE and the Nasdaq markets. This is a direct
result of traders using the ECNs.
The ECNs have fired the shot that will truly revolutionize how individuals
trade around the world. Beginning with extended hours and
then moving to full 24-hour trading, individual traders will have access to markets around the clock. This will change the statistical
information you have just learned. Over time, as 24-hour trading by
the public becomes more prominent, a new statistical field of information
will be created. Twenty-four-hour trading will mean that
volatility never stops. Investors will be forced by volatility to
become short-term traders. Mutual funds will have far more volatility
than they do today. Open-end mutual funds that calculate the net
asset value (NAV) at the end of the day will show large price fluctuations.
These large swings in NAV will add to investors' anxiety. The
old buy-and-hold strategies of past will create psychological stress.
Investing will actually have more risk than trading because while
you sleep your stock will still be in play. You may go to sleep with
your stock up $5, feeling very good about the gain and sleeping well.
However, in the morning, you may find that your $5 gain has
become a $15 loss due to overnight trading. Investing as you know
it today will be forever altered, and you will tell your grandchildren
about the "old days" when people used to buy and hold. This
change will cause the typical investor to become more actively
involved in the management of his or her capital. Those who simply
cannot handle the psychological stress will seek out a new breed of
professional trader to manage their money, or they'll choose some
other investment vehicles. The genie is out of the bottle. Nothing
can put it back. These economic forces will not be restrained. Like
it or not, 24-hour trading and ENCs are here to stay. They will
become the new economic engines of all industrialized nations,
adding to the liquidity of their markets. The ECNs will enhance the
globalization of markets and bring the world closer together.
International trading will become a reality for the individual as
a result of ECNs and 24-hour trading. Foreign stock traders will be
able to trade U.S. stocks, and U.S. citizens will be able to trade foreign
stocks at any time of the day or night. For the first time in history,
individuals will create world markets, internationally linked by
the ECNs. International and offshore trading capital will flow into
the new 24-hour markets, adding liquidity as well as volatility. In
these new and exciting markets, competition will cause the spreads
on stocks to become smaller and smaller. This is in the public's best
interest. We are already seeing the spreads on stocks becoming smaller on both the NYSE and the Nasdaq markets. This is a direct
result of traders using the ECNs.