The CEO of an exchange that is negotiating with the Securities and Exchange Commission to bring 24-hour trading to the US market said.
“The outlook is pretty bright for us for approval in 2022,” 24 Exchange founder and CEO Dmitri Galinov told CNBC’s “Edge ETF” on Thursday.
Launched in 2020 and supported by hedge fund billionaire Steve Cohen24 Exchange hopes to conclude negotiations with the SEC by the end of December and receive a license to begin operations next year, Galinov said.
The company specializes in forex, crypto and stock trading and aims to allow its clients to exchange a wide variety of assets with minimal friction and at low costs.
Cryptocurrency trading has fueled huge demand for the 24-hour stock exchange, Galinov said.
In terms of equity, “if you look right now, what’s trading in 4 hours right after 4 hours, it’s a very small amount. It’s only 4%,” the CEO said. “But if you look at crypto, more than a third of crypto trades outside of regular hours, on weekends, etc. But it’s the same traders.”
Traders around the world are also demanding greater access to US stocks, with many major banks and hedge funds telling 24 Exchange they are excited about its offering, Galinov said.
According to their website, the SEC’s stated concerns for open trading are limited liquidity, large spreads, higher volatility, uncertain pricing, and professional competition from professional traders. organizational translation.
However, Galinov paints a different picture: He characterizes his company’s interactions with regulators as “very productive” and “focused on the small details.”
However, the move raises some concerns, Dave Nadig of ETF Trends said in the same interview. “I’m optimistic about the idea. I’m skeptical of immediate demand,” said the company’s chief investment officer and research director.
Ignoring demand from crypto traders, problems can arise when it comes to products like exchange-traded funds, which trade baskets of stocks, said Nadig.
“I am highly skeptical of trading an ETF based on the after-hours news because I think it is unthinkable to have so much liquidity that you could effectively arbitrage an entire portfolio. Wednesday at two o’clock in the morning,” he said.
However, Nadig admits that round-the-clock trading is potentially inevitable.
“If we’re talking two, five, 10 years from now, I think we’re moving towards a more global 24/7 global market, it’s just a matter of how we get there. But I think it’s right to be skeptical.” he say. “Aftermarket volume is very thin. You can pull any particular stock that’s trading on earnings and you’ll see the liquidity spike at 4:05, and then the liquidity plummets immediately after that. what happened afterwards.”
