Around-the-clock global stock trading is becoming the order of the day.
Index options based on the Tokyo Stock Exchange’s Nikkei average are traded in London and Chicago, while nighttime stock dealings have proved a boon to earnings of participating stockbrokers in Japan.
While a nighttime exchange — advocated by the Tokyo Stock Exchange and fiercely opposed by major brokerages — has failed to get off the drawing board, nighttime trading services launched by some brokers independently from existing exchanges have secured a wide patronage from investors.
Although small brokers and online players supported the nighttime exchange proposed by the TSE last year, large brokerages opposed the idea for fear of, among other things, anticipated cost rises in conducting one-to-one transactions with customers.
Nighttime trading has become possible thanks to the “Big Bang” financial reforms.
Goldman Sachs, which has started a nighttime exchange in Japan, offers direct trades with customers, with no limit on daily price fluctuations.
As a result, stock prices can move in either direction before ordinary exchanges start trading the next morning.
Monex Securities, another securities company offering nighttime services, on the other hand, accepts orders for trading in shares at their closing prices on the normal exchanges each day.
DLJdirect SFG Securities Inc. and other online brokerages have joined Goldman Sachs in conducting nighttime trading.
On Monday, trading took place in 63 out of the 305 issues listed on Goldman Sachs’ “Moon Trade” exchange.
Out of 607 buy and sell offers, 192 went through, with the total value of trading reaching 196 million yen.
Of the 333 orders received by DLJdirect SFG, 94 went through, with the total value estimated at 200 million yen.
Orders received by Matsui Securities Co. for night trading Monday, the fourth day of its new undertaking, accounted for only 0.3 percent of its total dealings on the TSE.
Still, the figure was 8.2 times Matsui’s total dealings through the Nagoya bourse.
Those figures could presage a strong pickup in customer orders for such deals in the coming months.
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