Robinhood has recently introduced a 24-hour trading service for certain stocks, operating five days a week. This move can be interpreted as an attempt to bring traditional assets on par with digital assets, which already can be traded around the clock on several platforms, including Robinhood Crypto.
Termed the 24 Hour Market, this feature is set to be available for all customers in June. However, a selection of users will have the opportunity to test it out starting next week. Robinhood has clarified that the feature allows for limit orders on designated stocks, specifically focusing on the most traded single-name equities and ETFs.
Through the 24 Hour Market, users can place limit orders to buy whole shares of 43 of the most-traded ETFs and individual stocks, such as TSLA, AMZN, and AAPL. The trading hours will span from 8:00 pm ET on Sundays to 8:00 pm ET on Fridays.
This innovation has its own set of advantages and disadvantages. On the one hand, it addresses the growing demand for trading services that resemble the accessibility and speed of digital asset markets. Moreover, it increases liquidity by allowing trades during times when conventional markets are typically closed, giving investors more freedom to act on news and market shifts.
However, there is a lingering concern about the potential risks associated with extended trading hours. It may encourage impulsive trading decisions driven by emotions and news, rather than well-researched and tactical moves. Additionally, the 24-hour trading feature could lead to higher volatility levels and price manipulation, especially during non-regular market hours when fewer participants are active.
Regarding Robinhood’s overall business, it has been demonstrated that the public company’s first-quarter earnings showed an increase in assets under custody, growing to $78 billion. The crypto assets under custody for Robinhood clientele amounted to $11.5 billion in Q1, a substantial jump from $8.4 billion at the end of 2022.
While it remains to be seen if other trading platforms will follow suit with 24-hour trading capabilities, it is evident that this innovation has sparked dialogue within the financial community. This feature offers both promising opportunities and potential pitfalls, and it may well be the first in a series of transformations set to impact the traditional stock market landscape.
Source: Blockworks
