4

Every place closes at 5pm or 6pm, whatever the place and country is. Why do they close since fixing is done continually in the more liquid markets ? Thanks.

  • 1
    Futures trade on Globex nearly 24/6, closing Friday afternoon to Sunday afternoon and for about half an hour Sunday-Thursday. – TainToTain Apr 28 '16 at 23:44
13

Here are some plausible reasons why markets might continue to close:

  1. Fluidity keeps the market in check. In late night hours there would be less volume, and the markets might be more susceptible to manipulation.
  2. In Illinois, USA, car dealerships are closed on Sundays. It's been like that for 30 years and the thinking there is because otherwise the owners and managers would feel obligated to work 7 days per week, to prevent from losing out to their competition. Along those same lines, stock trading is a stressful job, and if the markets never closed, there might be a lot of people who never sleep and just continue working until they drop. Some casinos don't stay open 24 hours for the same reason.
  3. If it ain't broke, don't fix it.
  4. The cost of personnel in trading firms would triple to staff people 24/7.
4

I believe there are electronic exchanges that run continuously, but the older ones don't want to change their practices since some people may have strategies which (claim they) are based on this behavior so there would be a lot of unhappy people if it was altered.

The pause doesn't seem to do any harm. There are alternatives if you dislike it. Don't try to fix what isn't broken.

1

Most stocks are not actively trades by lots of people. When you buy or sell a stock the price is set by the “order book” – that is the other people looking to trade in the given stock at the same time.

Without a large number of active traders, it is very likely the pricing system will break down and result in widely changing prices second by second. Therefore for the market to work well, it need most people to be trading at the same time.

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