Brokers to Face Change in Reveille : Big Board Will Open 30 Minutes Earlier on Monday
Reveille will begin half an hour earlier for stock brokers beginning Monday, as the opening bell of the New York Stock Exchange will sound at 6:30 a.m. Pacific Time, the first time change for the big board in more than a decade.
Exchange officials hope that the new schedule will increase its business, particularly with European traders, and eventually pave the way for 24-hour stock trading.
Although the schedule change will affect their sleeping patterns, brokers in San Diego and other Southern California cities believe that the extra 30 minutes of trading will create new business for West Coast trading houses.
“There will be a lot more business,” predicted Dennis Brokaw, a broker with Sutro & Co. in La Jolla. “Just factor into the bottom line the extra commissions for every minute you’re open.”
Several brokers maintained that an even greater increase in trading activity would have occurred had the extra 30 minutes been tacked on to the end of the trading day. In contrast, the earlier opening affects a narrow band of stocks traded across the Atlantic and will mostly help eastern brokerages and institutional traders.
The change is ‘primarily oriented towards the East,” said Michael Collins, president of San Diego Securities. “People in San Diego who are interested in doing business at that hour are a relatively small percentage of customers.”
Brokaw next week will wake up at 4:45 a.m. so he can make the trip from his La Costa home to his office by 6 a.m. Despite the early hour, he said he welcomes the change because many of his clients are on the East Coast and in Europe and “it’s their working-day time” when it’s 6:30 in the morning here.
And for those San Diegans who would rather sleep than play the stock market, the extra half an hour may not make that much difference anyway. “If I have to make a decision, I may have to call a client,” said Brokaw. “But they’re happy to be disturbed in their sleep if it will save or make them money.”
Brokers will not be required to report to work earlier, Collins said, adding that most brokers spend their first hour at work reading business newspapers and catching up on news affecting their traded companies.
By law, brokerage houses must be staffed by the time the exchange opens. In practice, that means that the trading room operators will certainly be working earlier hours, as they sort through the prior day’s afternoon trade requests that must be entered at the opening bell.
“It will make our work day longer,” according to Nancy Shell, vice president of trading at San Diego Securities. That means overtime for some workers and overlapping schedules for others. “Expenses will be higher, but hopefully so will revenues,” she added.
Indeed, the earlier opening is expected to cost one regional exchange about $300,000 a month, and most traders believe it will take some time before their firms recoup those added expenses.
Donald E. Nickelson, president of the retail brokerage arm of Paine Webber Inc., agrees. “There is no benefit to California that I can see,” he said during a recent visit to Los Angeles. “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.”
Brokers in Hawaii probably will be the most inconvenienced. Offices there will open at 3:30 a.m. beginning Monday, making an already-compressed trading day even shorter. (The market closes at 10:30 a.m. Hawaii time.)
Changing the Big Board’s hours is not new. For nearly 100 years after the exchange opened in 1792, there were no fixed trading hours. In 1872, hours were set from Monday through Saturday. Then weekday hours were extended and Saturday trading eliminated in 1952. The closing was extended half an hour to 4 p.m. (eastern time) 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.
