Speed Traders Want a Later Start to a Shorter London Trading Day
The European Principal Traders Association said most of its members favor pushing back the start of trading to 9 a.m. from 8 a.m.
(Bloomberg) --
While speed trading firms may rely more on computers than human beings, the lobby group for Citadel Securities and Virtu Financial LLC agrees that shortening London’s notoriously early-starting trading day would be better for professionals’ well-being.
The European Principal Traders Association, which represents some of the biggest firms that trade with their own capital, said Wednesday that most of its members favor pushing back the start of trading to 9 a.m. from 8 a.m. EPTA is the latest organization to submit a response after London Stock Exchange Group Plc begain consulting market participants about a shorter day.
The lobby group said it prefers to keep the current 4:30 p.m. closing time for “market quality,” and to preserve two hours of overlap with the New York trading day. That view isn’t shared by the majority of market participants: a Bloomberg survey earlier this month showed that 75% are in favor of an earlier close. London’s trading day is currently two hours longer than its New York equivalent.
Speed traders rely on highly liquid and deep markets to make sliver-thin margins on trades, hundreds of times a day, in fractions of a second.
The principal traders also warned that shorter hours may mean some trades move to other venues -- such as so-called systematic internalizers -- or else be transformed into derivatives trades instead, rather than cash equity transactions.
To make shorter hours work effectively, European exchanges should harmonize their hours and days off, and core hours for equity options and single-stock futures should be aligned with those for cash equities trading, EPTA said.
To contact the reporter on this story: Viren Vaghela in London at vvaghela1@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell, Marion Dakers
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