Robotaxis, tech earnings and 24-hour trading

Aiden Reiter (0:06)

Pushkin. If you read the FT in print, you definitely know the Lex column. It's the back page of the FT Every Day. It's a variety of takes on companies, finance, and markets, and it's an institution. Today on the show, we're taking three stories from Lex.

This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. My name is Aiden Reiter. I'm filling in for the delightfully British Katie Martin and the grotesquely American Rob Armstrong. Today, I'm joined by John Foley, the head of the Lex column.

John Foley (0:42)

Also delightfully British.

Aiden Reiter (0:45)

Yes, and I guess I'm also grotesquely American. Well, John, we have a couple topics to talk about today. 24-hour trading, tech earnings, and robo-taxis. Let's start with 24-hour trading. Why in the world is this a thing?

John Foley (0:58)

Yes. What's happening is that the London Stock Exchange, we reported, the FT reported a few days ago is considering extending its trading hours. At the moment, trading in London happens basically between 8 o'clock in the morning and 4:30 p.m. What a shander.

Aiden Reiter (1:13)

How terrible.

John Foley (1:14)

I know. Imagine that. But it sort of does feel a little old-fashioned, I guess. I mean, it's also true in the US. Like the US trading hours are like, Nasdaq and Nike, 9.3 to 4 o'clock. And that hasn't really changed since the 80s.

Aiden Reiter (1:26)

Yeah, we're lazy over here. It's just 9.3 to 4 o'clock.

John Foley (1:29)

But the world has changed, and everything is crypto, and crypto is 24 hours.

Aiden Reiter (1:32)

Yes. And this is, I think, the key thing. Every time we talk to crypto bugs, you try to get them really talking about why do they love crypto? And one of the many, many reasons they'll throw at you, which I'm not sure is so valid, is that, well, obviously, we're all constrained by the limited hours of Nasdaq or LSAC. We need to have 24-hour trading.

John Foley (1:51)

Right.

Aiden Reiter (1:52)

But who actually wants this? I mean, what's the point?

John Foley (1:54)

Well, so there is... Trading has changed, right? Retail investors and, you know, investing from your cell phone, the GameStop meme stock saga showed that there is an army of traders who are doing stuff from their phone after dinner, in the middle of the night, whenever they want to. So the idea that trading should only happen in this kind of... Not even full office hours, right? It's not like nine to five. In London, it's like eight to 4.30. The trading should only happen then. Does seem a little bit antiquated. Now as it turns out, you can already, if you are a retail investor, there are lots of ways that you can trade 24 hours. If you use Robin Hood, if you use interactive brokers, if you use Schwalb...

Aiden Reiter (2:30)

How is that trading... If the market is closed, how is that actually 24-hour trading?

John Foley (2:33)

Because what they do is they're using basically dark pool, so off-exchange trading platforms where you can make a trade, you can basically sell your stock. They don't clear until the next day, but you can... And you may not get the absolute best price because you're not getting all of the information that you get during the day with all of that liquidity, all those institutions trading. You don't have what they call the tape, the record of all the trades that happened during the day. That only goes through official trading hours. So it's not quite as good as the real thing, but you can get almost as good as the real thing. So what the exchanges are talking about now, and it's not just the LSE, it's also NYSE has also applied to extend its trading hours. It would be having official trading hours that go on, if not fully 24 hours, then 22 hours in some cases.

Aiden Reiter (3:16)

So New York is also applying for this. It's not just London.

John Foley (3:18)

Yeah, so in the US, you have, there's a new exchange called 24X, which has been given approval to trade, not quite 24 hours, but more or less 24 hours. The New York Stock Exchange has also applied, and so has NASDAQ, to trade much longer hours. They will all have a kind of break. A lot of the time, we talk not about 24-7, but 24-5, so five days a week. And often it involves a stop for maybe two hours overnight for people to reset their computers, install software, whatever it may be. But this is not just a UK thing. And actually, interestingly, even in the 80s, when NYSE last changed its trading hours by half an hour, people were talking then about the inevitability of 24-hour trading. So Dick Grasso, who was the CEO of the New York Stock Exchange, always said in the 90s that they would move towards 24-hour trading. It just hasn't happened for various reasons.