In an exchange like NYSE, with an actual trading floor, I understand that the floor, say, opens at 9:30am and ends at 4:00pm. These are the 'trading hours'. So,

  1. After 4:00pm, there are after-hours trading with reduced liquidity, but what does this mean? Is it that most of the floor traders go hom,e but some stay back, and that is why liquidity is reduced?

  2. For an online marketplace like ARCA, BATS, TSX, etc. how does the concept of trading hours vs. after-hours apply? Online means 24/7 usually, so how does this work?

  • Congratulations on your name change! ? :) – Chris W. Rea Feb 22 '14 at 0:47
  • Yes...people at work were catching on:) – Victor123 Feb 22 '14 at 15:04

During after hours, there is less liquidity, defined as the quantity of the asset on the limit book and the spread between the best orders.

Actually, for the most liquid securities in the US, trading has actually been extended by fifteen minutes. The liquidity there seems to be rising up to normal levels. If trading on those securities matches normal hours then it wouldn't be unreasonable to assume another fifteen minutes will be added and so on.

The primary exchanges close trading mostly at 4:00 PM with the above noted exceptions. The secondary exchanges trade almost non-stop. They use their internal inventory to do so or communicate directly with the registering agent.

This has little to do with floor traders but more with tradition since the NASDAQ also closes at 4:00 PM. If more demand it, the exchanges should be expected to extend trading hours, regulation permitting.

I can't speak to Canada's regulation, but in the US, trading hours are traditional not regulatory.

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  • It's the same in Canada. And just about every exchange (10+) seems to have its own schedule. – Andrew Cheong Jan 21 '16 at 20:05

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