All-Night ETF Trading Arrives for TD Ameritrade Customers

(Bloomberg) -- Stock traders who want to pull all-nighters can now do so through TD Ameritrade Holding Corp.

The second-biggest discount broker now lets customers buy and sell 12 U.S. exchange-traded funds 24 hours a day on weekdays. Clients in Asia will be among the beneficiaries, gaining the ability to trade U.S. products during their daylight hours. But Americans wanting to key off late-breaking news can participate, too.

When events such as U.S. elections or the U.K.’s 2016 vote to leave the Europe Union happen, “clients want to interact with the market, but they can’t because it’s not open,” said Steve Quirk, TD Ameritrade’s executive vice president of trading and education. “Almost 70 percent of the time, clients are doing their research and making their decisions at a time when they aren’t able to trade.”

While the New York Stock Exchange famously rings a bell at 9:30 a.m. and 4 p.m. to mark the start and close of trading, the reality has long been that a lot of trading takes place outside those hours. Exchanges like NYSE Arca and the Nasdaq Stock Market are open from 4 a.m. to 8 p.m. every weekday. Back during the 1990s dot-com bubble, there was talk of 24-hours-a-day trading through the new electronic markets that popped up during that era. TD Ameritrade is taking a step toward finally making that a reality.

Few orders placed through retail brokers such as TD Ameritrade ever reach a public exchange like NYSE. They’re fed to firms including Virtu Financial Inc. and Citadel Securities, which execute the trades internally against shares they have on hand. And because those firms are highly automated, their computers should be able to complete orders at any hour of the day.

TD Ameritrade says it’s working with Virtu to route and execute orders through this new all-night session.

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Initially, TD Ameritrade clients can trade 12 widely held ETFs including funds that track the S&P 500 Index and Dow Jones Industrial Average, Chinese shares and commodities. The company said it plans to offer more securities later.

Trades must be placed as limit orders that set a price to buy or sell. If not executed by 8 p.m., orders expire.

“It’s just a continuation of the evolution of leveling the playing field for retail clients,” Quirk said. “The information for clients to do research and the technologies are there. We have 700,000 people interacting with us daily, well over a third through their mobile device. This has been the one disconnect. Think of it this way. I have a restaurant that’s lit up, I can see the menu, but I can’t buy anything. Now you can.”

Here is a full list of ETFs available for trading at the debut:

--With assistance from Nick Baker

To contact the reporter on this story: Rob Urban in New York at robprag@bloomberg.net.

To contact the editors responsible for this story: Nick Baker at nbaker7@bloomberg.net, Josh Friedman

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