Day to Break Earlier for Brokers : NYSE Hours Change Means Offices to Open at 6:30 a.m.
By the time 10 a.m. rolls around, Newport Beach stockbroker Bob Schiff is a self-proclaimed zombie.
So what does it matter, he asks, that beginning Monday the New York, American, Pacific and over-the-counter stock exchanges will open yet a half-hour earlier, at 9:30 EDT, forcing him to rise in California’s pre-dawn dark at 4 a.m., do his jogging at 5 a.m. and be at work by 6:30 a.m. PDT?
“To some people, it will be a pain,” said Schiff, an account executive at Crowell Weedon & Co. “But to others . . . getting up earlier in the morning can make a difference in your investment results. I think it’s a great idea.”
So apparently do the major exchanges, which hope the earlier opening will increase business, particularly with European traders, and eventually pave the way for 24-hour stock trading.
Many brokers argue that the West would have benefited more if the extra 30 minutes were tacked onto the end of the trading day. They say a later closing would have generated more trading activity in a broader spectrum of stocks, particularly from the western parts of the United States.
In contrast, the earlier opening--the first change of hours at the major stock exchanges since 1974--affects a narrow band of stocks traded across the Atlantic and will mostly help eastern brokerages and institutional traders.
“I think it’s unfair to the West Coast and greed on behalf of the East Coast, “ said Bob Jenkins, assistant office manager at First Affiliated Securities in Newport Beach, adding that the time change was the East Coast brokers’ way of “squeezing a little more time in to push a few more orders.”
“For the guys on the West Coast, it’s already a tough day,” Jenkins said.
‘No Benefit to California’
Donald E. Nickelson, president of the retail brokerage arm of New York-based Paine Webber, agrees. “There is no benefit to California that I can see,” he said. “It does not create a window to do more business” in the West. “We have to do it, the question is how to do it cost-effectively.”
The large national brokerages will have more of their support staff in for the early opening than the smaller local brokerages. Said Anthony P. George, vice president and resident manager of the Brentwood office of Los Angeles-based Wedbush, Noble, Cooke Inc.: “The only major problem is we have to bring in one wire operator a half-hour earlier.”
Expenses are expected to be far greater for the various regional exchanges. The Pacific Stock Exchange’s 100 floor-trading employees in Los Angeles and San Francisco will all have to come in half an hour earlier.
Jim Gallagher, president of the Pacific exchange, said that costs will go up, particularly for overtime and computer use. “We haven’t figured out how much yet,” he said, adding that he expects to have a better reading by the end of October.
An official of another regional exchange, who asked not to be identified, said the exchange will incur about $300,000 a month in additional staff, telephone and other expenses.
Most traders say it will take quite some time to get any payback on the extra 30 minutes of trading.
Gallagher said it is “absolutely unclear” how much net new business will result from the extra time. “Some argue (that) now we’ll see the same volume spread over the additional time,” he said. “What is clear is that we don’t have a choice. If the NYSE extends its hours, we have to follow.”
The time change also is not expected to have much impact on individual investors because institutions account for most of the international trading.
Some brokers, however, aren’t taking any chances of missing some new early-bird customers, despite the disruption in the already odd hours of their lives.
‘More of an Opportunity’
For Tom Chronert, vice president and branch manager of the Orange office of Dean Witter, having to go to bed at 9 p.m. instead of 9:30 p.m. doesn’t alter the fact that the Johnny Carson show--once his favorite--is still beyond his reach.
“I would rather have had it tacked on to the end of the day,” said Chronert, 49. “It just gives us more of an opportunity to service our clients.”
The time change also gives Chronert’s wife, Lynne, the unenviable job of getting up at 5 a.m. instead of 5:30 a.m. to make her husband’s breakfast.
“I think it’s a raw deal,” she said. “Those guys back in New York are making it more convenient for themselves and are not thinking of the lucky people living in California. Maybe they wanted to zap it to us.”
Lynne Chronert said she and her husband have grown accustomed to going to bed early and that relatives and friends “can’t stay over at our house,” unless they don’t mind retiring for the evening while the night is still young.
“The night is short enough when you have to be in bed at 10,” concurred Crowell Weedon’s Schiff, who is married and has a 13-year-old son. “But I think it’s important, so I’m willing to do it.”
3:30 Opening in Hawaii
“This may get even earlier, you know, like maybe 9 a.m. New York time,” he cautioned. “After all, it’s a business decision and if volume picks up. . . .”
Brokers in Hawaii probably will be the most inconvenienced. As of Monday, Wedbush’s Honolulu office will be open at 3:30 a.m. Alaska-Hawaii time.
Changing the Big Board’s hours is not new. For nearly 100 years after the New York Stock Exchange’s opening in 1792, there were no fixed trading hours. In 1872, hours were set from Monday through Saturday. Weekday hours were extended and Saturday trading was eliminated in 1952. The closing was extended a half-hour to 4 p.m. EDT in 1974.
The latest change by the New York Stock Exchange, announced July 10, was promptly matched by the American and Pacific exchanges and the National Assn. of Securities Dealers, which operates the over-the-counter market.
