By: Joshua Finley
In a bold move that has sparked both excitement and controversy, the New York Stock Exchange recently announced plans to extend trading hours on its digital platform. With the global appetite for surging, the exchange is set to operate from 1:30 a.m. to 11:30 p.m. ET—an ambitious leap from the current window of 4 a.m. to 8 p.m. ET. While this expansion is seen as a step toward improving global accessibility, some critics suggest it could unintentionally benefit institutional algorithms, potentially making it more challenging for everyday investors to compete.
George Kailas, CEO of Prospero.AI and a seasoned voice in finance and technology, is among those raising the alarm. “This reflects a concerning trend in investing,” Kailas explains. “We already have brokerages that simplify complicated options strategies alongside 24-hour markets. These developments may be harmful because brokerages profit from payment for order flow, which puts retail investors second.”
At first glance, the prospect of extended trading hours is a progressive step forward. After all, global demand for U.S. equities is undeniable, and providing foreign investors more convenient access to American markets could enhance liquidity and strengthen the NYSE’s global standing.
However, there’s a darker side to this move. Extended hours primarily benefit those equipped with sophisticated trading algorithms—programs that analyze data and execute trades at lightning speed. This shift could further exacerbate the uneven playing field between retail investors and institutions.
As Kailas points out, human investors and financial officers rarely have the capacity—or the desire—to trade at 2 a.m. “Even in more transparent market structures like the NYSE, longer market hours favor institutions with technology,” he says. “This is because AIs do not have to sleep, while people do. Even if you could monitor the markets every waking hour, there is an inherent disadvantage.”
The financial markets have long been a battleground for cutting-edge technology, but the gap between retail and institutional investors has never been more stark. Institutions wield powerful AI tools capable of processing vast data and executing trades in milliseconds. Meanwhile, retail investors are left grappling with user-friendly interfaces that often oversimplify complex strategies, lulling them into a false sense of confidence.
The rise of payment for order flow—a system where brokerages sell retail orders to market makers—further compounds this issue. By its very nature, this practice prioritizes institutional efficiency over retail fairness, a dynamic that longer trading hours could intensify.
“There’s a positive side to making it easy for foreign investors to become more involved with the American markets,” Kailas acknowledges. “But this is not worth the price of disadvantaging American retail investors further.”
While proponents of extended trading hours emphasize the potential for increased liquidity and market engagement, the question remains: Who truly stands to gain?
For high-frequency trading firms and institutional investors, the answer is clear. Extended hours mean more opportunities to capitalize on minute market fluctuations with the assistance of AI-driven strategies that operate 24/7. However, for retail investors, the benefits are far less certain.
The average investor, already struggling to keep pace with real-time market changes during standard hours, is unlikely to benefit from the added complexity of near-continuous trading. Instead, the move could lead to heightened volatility during these extended hours, making it even harder for non-professionals to navigate the market effectively.
The NYSE’s decision raises critical questions about the future of investing. Are we building a market ecosystem that empowers all participants or continuing to concentrate advantages among the elite few?
As the debate unfolds, Kailas offers a sobering perspective: “The longer the market operates, the more it favors those who can afford the tools and resources to exploit every tick and trend. For the retail investor, this often means being left behind.”
While the benefits of global accessibility cannot be denied, the unintended consequences of such a move must be considered. Policymakers and industry leaders must weigh the potential for increased participation against the risks of alienating the very investors who form the backbone of the market.
The NYSE’s extended trading hours may well represent the future of global finance—a 24/7 marketplace driven by data and algorithms. But as we march toward this future, it’s worth asking whether we’re sacrificing too much in the name of progress.
Retail investors can only hope that regulators and exchanges take steps to ensure these changes don’t further widen the gap between Wall Street and Main Street. In the end, a market that leaves behind the average investor fails to fulfill its true purpose.
Disclaimer: This content is for general informational purposes only and should not be considered as financial advice. The content is not intended to be a substitute for professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions.
Published by Rain S.
