It's all digital and done with computers these days, so why bother? Doesn't that just make the system less liquid, which is the opposite to one aim of having the stock market?
Plus can't you just play the futures market after hours anyway?
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While a lot of trading is executed by computers, a substantial amount is still done at the behest of humans. Brokers managing accounts, Portfolio Managers, and Managers of Mutual Funds doing stock picks etc. Those folks are still initiating a very large number of the trades (or at least one side of a trade). And those humans don't work 7 days a week.
it's not just computers talking to computers at the behest of other computers. And even a lot of places that use computers to create models and such, there are still humans in the loop to ensure that the computers are not ordering something stupid to be done.
I personally worked for a firm that managed nearly $20Billion in stock portfolios. The portfolios were designed to track indexes, or a mix of indexes and actively managed funds, but with the addition of managing for tax efficiency. A lot of complex math and complicated 'solver' programs that figured out each day what if anything to trade in each portfolio. Despite all those computers, humans still reviewed all the trades to be sure they made sense. And those humans only worked 5 days a week.
"After-hours trading" and alternate venues allow one to trade outside of regular market hours. However there are a few reasons why you would not want to:
The purpose of an exchange is to improve liquidity by gathering all buyers and sellers in the same place at the same time. If trading was 24/7, not all market participants would be trading at the same time.
Some markets (including NASDAQ) depend on market makers or specialists to help liquidity. These exchanges are able to mandate that the market maker actively make a market in a security during a meaningful percentage of the trading day. Requiring 24/7 active market making may not be reasonable.
Trading systems, meaning both exchange infrastructure and market participant infrastructure, need maintenance time. It's nice to have the evenings and weekends for scheduled work.
Post-trade clearing and settlement procedures are still somewhat manual at times. You need staff around to handle these processes.
The answer is 7-fold:
BOTTOM LINES: Bubble; bursting bubble; Great Depression; Victory in WWII; All work and no play makes Jack (& Jill) very dull persons.
The stock markets are closed on week-ends and public holidays because the Banks are closed. The Banking is a must to settle the payment obligations.
So you may buy and sell as much as you wish, but unless money changes hands, nothing has really happened.
Now as to why Banking itself is closed on week-ends and public holidays, well a different question :)
Keeping the system 24 hrs up and running does not actually push volumes, but definately push expenses for brokers, Banks etc. There definately is some convinience to buyers and sellers.
There are a number of factors here.
1) It's important that there is human oversight on the system. At one level someone needs to be monitoring the computers that manage the trading to be sure they are functioning. At another level someone needs to be making judgement calls on important but rare events: when you you suspend trading in a stock? When do you close the stock exchange entirely? It is alleged that unsupervised computer trades were at least partly responsible for the May 2010 selloff. Even if that's unproven, would you really want those unsupervised computers trading with each other for a couple of days? Or even for a couple of hours?
2) Providing 24/7 trading would increase the cost of running a stock exchange, but with only a tiny improvement in liquidity.
3) If the stock exchange ran 24/7 then traders would have to run 24/7. That would add hugely to the cost of trading.
4) The people who would really suffer would be day traders - because there would no longer be such a thing as a day trader. If you were a sole trader then you would need to monitor your investments 24/7, or risk waking up in the morning to find one of your stocks had plummeted overnight.
Simply, most of the above given 'answers' are mere 'justifications' for a practice that has become anachronistic. It did make sense once in the past, but not any more. Computers and networks can run non-stop 24/7; even though the same human beings cannot be expected to work 24/7, we have invented the beautiful concept of multiple shifts; banks may be closed during nights and weekends, but banking is never closed in the internet era; ...The answer must lie in the vested interests of a few stakeholder groups - or - it could just be our difficult to change habits.
The stock market is open at certain hours/days due purely to historical reasons. While most trading is performed electronically by the market makers these days, technology on this front is still relatively new, especially considering that some of the people working in the trading industry today were around well before technology was so intricately connected in to the system.
It could even take several more generations of separation until people in the industry start questioning the status quo, and adjust the rules to match reality.