Hong Kong Looks to Other Contracts for After Hours Trade
The Hang Seng Index began after hours trading yesterday, allowing trades to occur from 5 p.m. to 11 p.m. It is hoped that the after hours trading will allow Hong Kong traders to have more flexibility in adjusting their positions upon observations of other world events. As of right now, the plan is to extend the hours for futures in Hong Kong’s main two indexes, but there is no definitive plan in place.
The change is not universally acclaimed, however, as local brokers protest that they are going to lose their already tiny market share of trading. “Of the 571 Hong Kong stock-exchange participants, the biggest 14 accounted for 59 percent of the market in February and the largest 65 were responsible for 90 percent,” and they are only going to get bigger if they are the only ones who can afford the cost of setting up after hours trading. There is also the argument that the introduction of after hours trading may not even be worth it if the benefits do not outweigh infrastructure costs.
I believe that the extra hours provided to traders will be helpful to their positions, and I think the majority of them will take advantage of the new hours. Everybody wants to stay ahead of the markets, and extended hours will assist Hong Kong in doing so. Although, I feel bad for the many traders who are going to be facing longer hours on the job now.