Financial Markets : NYSE to Begin Off-Hours Trading Soon, Report Says

The New York Stock Exchange will begin trading stocks outside of its normal hours and off its trading floor later this year, a first in its nearly 200-year history, a newspaper reported.

The plans are an attempt to recapture trading volume in NYSE-listed stocks from foreign markets, especially London and Tokyo, as the world moves toward around-the-clock stock trading, the New York Times said in an early edition of today’s newspaper.

The new trading will be conducted electronically and may bypass the specialists, the floor traders through whom stock transactions are routed currently, the Times said.

The newspaper cited unidentified people in the industry who have been briefed by stock exchange officials.

Richard Torrenzano, an exchange spokesman reached late Wednesday, said the Big Board has been studying the possibility of off-hours trading for two years, “and we’ve begun to discuss some very innovative ways to approach that idea.

“If we see a need by our customers to have an off-hour trading system, we will move very innovatively and quickly to meet that customer demand,” he said.

The Times said the exchange plans to begin two limited after-hours trading sessions later this year, with different rules applying than during daytime trading.

Sometime in 1991, the exchange plans to conduct auctions of each Big Board stock at 8 p.m., midnight and 5 a.m. New York time, the newspaper said. Each stock would trade only once at each auction, with all trades combined at a single agreed price.

The three auction times would coincide with the start of the Tokyo business day, the middle of the Tokyo day and the early part of the London business day.

It is estimated that 15 million to 20 million shares of NYSE stocks trade each day outside of exchange hours. Average volume during the exchange’s 9:30 a.m. to 4 p.m. session has been running at about 160 million shares recently.