The notion of US stock exchanges remaining open for twenty-four hours on a national holiday, such as Independence Day, is a seductive, if somewhat whimsical, proposition. The idea, recently floated by the account StockMKTNewz, taps into a modern desire for relentless market access, questioning the seemingly archaic tradition of pausing commerce for celebration. While the sentiment is understandable in an age of borderless capital and always-on crypto markets, a closer examination reveals that market holidays are less a relic of the past and more a critical, if unappreciated, component of market structure and stability.
Key Takeaways
- Holiday closures serve a crucial function beyond tradition, ensuring operational stability and preventing trading in dangerously illiquid conditions.
- While technology theoretically permits 24/7 trading, the existing market ecosystem of clearing, settlement, and regulatory oversight is built around a structured trading day.
- The precedent set by crypto markets is often misleading, as it overlooks the fundamental infrastructural differences and the absence of systemic safeguards found in traditional equities.
- Pre-holiday trading sessions consistently exhibit significantly lower volumes, suggesting any extended holiday session would likely suffer from poor liquidity, wider bid-ask spreads, and heightened volatility.
- The future of continuous market access may lie not in forcing traditional exchanges to operate 24/7, but in the evolution of tokenised securities and dedicated after-hours trading platforms.
The Enduring Logic of the Closing Bell
The primary rationale for market closures on federal holidays is not merely to give traders the day off. It is a deeply embedded operational necessity. The entire financial architecture, from the exchanges themselves to the clearing houses like the Depository Trust & Clearing Corporation (DTCC), is designed around a finite trading day. After the closing bell rings, a complex, high-stakes process of clearing and settling trades begins. This involves reconciling billions of dollars in transactions, managing collateral, and ensuring the orderly transfer of securities and cash. Running this machinery without interruption, especially with the skeleton crews that would inevitably be on duty during a national holiday, would introduce considerable operational risk.
These scheduled pauses act as systemic circuit breakers. They allow for essential system maintenance, software updates, and, crucially, a human reset. In an industry defined by high stress and information overload, forced downtime prevents burnout and reduces the likelihood of costly human error. The market is an ecosystem, not just a ticker on a screen; it relies on an army of compliance officers, risk managers, back-office staff, and IT professionals who also observe these holidays.
The Illusion of an ‘Always-On’ Equity Market
The argument for 24/7 markets often points to two main drivers: globalisation and the example set by digital assets. It is true that capital never sleeps, and an event in Asia can have immediate repercussions for US-listed companies. Likewise, the cryptocurrency markets have demonstrated that a 24/7/365 trading environment is technologically feasible. However, this comparison is fraught with peril.
Crypto markets operate on a fundamentally different, decentralised, and less intermediated infrastructure. The regulated equity markets, by contrast, are a web of interdependent, regulated entities. Extending trading hours is not as simple as flipping a switch. It would necessitate a complete overhaul of post-trade processes and the regulatory frameworks that govern them. It also ignores that mechanisms for after-hours access already exist through futures and certain Electronic Communication Networks (ECNs), which cater to institutional players managing overnight risk without requiring the entire market to remain open.
The Perils of a Liquidity Vacuum
Even if the operational hurdles were overcome, a holiday trading session would likely be a hazardous environment for most participants. Market liquidity is the lifeblood of efficient price discovery, and it is overwhelmingly supplied by institutional investors. On a major public holiday, the vast majority of these professional trading desks are unstaffed. The result would not be a vibrant, active market, but a liquidity desert.
Trading volumes on the days preceding major holidays, such as the early close before Independence Day or Thanksgiving, are routinely and significantly lower than average. This thin liquidity leads to wider bid-ask spreads, making it more expensive to execute trades. More dangerously, it makes the market susceptible to extreme volatility and “flash events,” where a single large order can move prices dramatically. For a retail investor, venturing into such a market would be akin to swimming in treacherous, unpredictable currents.
| Trading Session | Typical Volume vs. Daily Average | Key Characteristics |
|---|---|---|
| Normal Trading Day | 100% (Baseline) | Deep liquidity, tight spreads, institutional participation. |
| Pre-Holiday (Early Close) | ~60-75% | Declining volume as institutions wind down positions. |
| Hypothetical Holiday Session | Extremely Low (<25%) | Dominated by algorithmic and retail flow; wide spreads, high volatility risk. |
A Solution in Search of a Problem
Ultimately, the call for 24-hour holiday trading appears to be a solution in search of a genuine problem. The current structure, with its scheduled closures, provides a well-understood framework that balances access with stability. It protects the market’s plumbing from undue strain and shields investors from the hazards of illiquid trading conditions. The official calendars published by exchanges like the NYSE and Nasdaq are planned years in advance, giving all participants certainty.1,2
The desire for constant action is a powerful impulse, but it should not be conflated with what makes a market fair and orderly. The true evolution towards greater market access is more likely to come from the periphery. Innovations in extended-hours trading platforms, or the eventual rise of tokenised securities that can trade on entirely new, blockchain-based rails, may one day offer a version of 24/7 access. Forcing the existing, intricate system of the traditional stock market to operate nonstop, however, remains a dangerous and unnecessary proposition. The holiday bell, for now, should continue to ring.
References
1. NYSE. (n.d.). Holidays and Trading Hours. Retrieved from https://www.nyse.com/markets/hours-calendars
2. Bankrate. (2024). Stock market holidays: What investors should know. Retrieved from https://www.bankrate.com/investing/stock-market-holidays/
3. StockMKTNewz. (2024, July 4). [I feel like for America’s Birthday the stock market should be open 24 hours not closed all day]. Retrieved from https://x.com/StockMKTNewz/status/1808315330889990219
