24/7 Stock Trading Aims to Curb After-Hours Price Manipulation, Boosting Traders

The shift toward 24/7 stock trading is gaining momentum as major U.S. exchanges, including the NYSE, Nasdaq, CME, and Cboe, seek to expand trading hours. Market analyst Mati Greenspan of Quantum Economics argues that this change will primarily benefit traders, who have long been vulnerable to price manipulation during after-hours sessions. Greenspan claims that during market closures, a small group of firms often dictates the first tradable price, sometimes triggering stop-loss orders to the detriment of individual investors. He asserts that brokers have historically coordinated pricing strategies during these periods, a practice he describes as outright manipulation. The current after-hours market, which closes at 4 p.m. ET, suffers from thin liquidity, leading to wider spreads and exaggerated price movements. Joe Dente, a floor broker at the NYSE, notes that post-4 p.m. liquidity is significantly reduced, creating an environment where prices can be more easily influenced. Academic research supports this view, with a UC Berkeley–University of Rochester study highlighting the inefficiency of after-hours price discovery due to lower volume and liquidity. These conditions have allowed brokers to exploit market gaps, often to the disadvantage of retail investors. As exchanges push for regulatory approval, the potential for 24/7 trading raises questions about whether manipulation will persist in new formats. Greenspan acknowledges that while brokers may attempt to maintain their influence, the increased transparency and liquidity of round-the-clock trading could limit such practices. Meanwhile, a broker familiar with overnight trading practices, who requested anonymity, noted that thin liquidity during overnight sessions has occasionally enabled coordinated strategies to influence prices. However, the introduction of 24/7 trading may reduce these opportunities by ensuring continuous market activity. The debate over market integrity remains central as regulators and exchanges navigate the transition. While critics argue that 24/7 trading could introduce new vulnerabilities, proponents believe it will foster a more equitable and efficient market structure. For now, the focus remains on whether the implementation of 24/7 trading will deliver on its promise to curb manipulation and enhance investor confidence.