Blockchain Never Sleeps: What If Stock Markets Were Open 24/7 During Market Sell-Offs?

What advantages could blockchain powered stock trading have during times of market sell-offs?

By Vanessa Malone

This past Monday morning, the Dow Jones Industrial Average fell more than 1,000 points.¹ The Nikkei 225, an index of leading stocks in Tokyo, closed down 5.8% Friday, and then 12.4% on Monday.²

With traditional stock trading hours, an entire weekend passed with traders eagerly awaiting the market’s reopening to buy or sell at the new prices. This scenario prompts the question of how different the landscape would be if all stock markets operated with 24/7 trading and instantaneous settlement.

Traditional markets are limited to regular business hours, in local time, due to the need for human oversight, but blockchain markets are self-sufficient and operate continuously, driven by smart contracts.

If stock markets were powered by blockchain technology, such as Horizon’s Ethereum-based platform which underpins the Upstream stock trading app part of MERJ Exchange, this model becomes feasible. Upstream, for example, gives traders the ability to transact on all of our issuers listed equities irrespective of time of day. Blockchain never sleeps.

So what advantages could blockchain powered trading have during times of market sell-offs?

1. Immediate Responses to Market News. For example, if a retail investor was informed on Friday after market hours about the global dip, they could capitalize on the news immediately and place a sell order with the opportunity to be executed immediately, locking in a price based on the current market conditions. This could potentially avoid unwanted losses. On the other side, the trader could also take advantage of the dip and buy. In the current market, the investor had to wait until Monday, during which time the market may have already reacted.
2. Less Gaps in Market Opening Prices. News that issuers publish outside of trading hours can cause spikes and dips overnight or over the weekend. This could mean trades executing at a much lower price if the news was negative. With the ability to trade immediately, investors can execute their trades with more transparent, predictable pricing. Further, with transparent orderbooks like on Upstream, best bids and offers are publicly displayed.
3. Instantaneous Settlement Means Capital can be Reallocated more Quickly. With instant settlement like what happens on Upstream, funds are immediately available for further trading. In traditional markets, settlement just recently went from two days (T+2) to one day (T+1) for some markets, but that delay could still result in missing out on other investment opportunities.
4. Empowering Retail Investors. In moving to a 24/7 model with real-time trading and instantaneous settlement, retail investors are empowered to place orders at their convenience and potentially manage their investments more effectively in volatile conditions. A concern over 24/7 access could be the problem of panic selling when news comes out. According to Axios and data from Interactive Brokers, many retail investors took advantage of Monday’s sell-off to buy instead of run out of the market.³

24/7 trading is already a reality in crypto markets, and markets are actively looking into what a 24/7 model would look like for securities trading. Retail brokers like Robinhood and Interactive Brokers are already appeasing traders with expanded trading hours through internal matching or dark pools. We believe aligning securities trading with this model is more of a matter of when, not if. The technology and demand is there and growing. A global, interconnected market could be on the Horizon.

Sources: 1 NPR | 2 CNN | 3 Axios

Disclaimers
U.S. persons may not deposit, buy, or sell securities on Upstream.

This communication shall not constitute an offer to sell securities or the solicitation of an offer to buy securities in any jurisdiction where such offer or solicitation is not permitted. Collectibles have no royalties, equity ownership, or dividends. Collectibles are for utility, collection, redemption, or display purposes only. Anyone may buy and sell Collectibles on Upstream. All orders for sale are non-solicited by Upstream and a user’s decision to trade securities must be based on their own investment judgment.

Upstream is a MERJ Exchange market. MERJ Exchange is a licensed Securities Exchange, an affiliate of the World Federation of Exchanges, a National Numbering Agency, and a member of ANNA. MERJ is regulated in the Seychelles by the Financial Services Authority, https://fsaseychelles.sc/, an associate member of the International Association of Securities Commissions (IOSCO). MERJ supports global issuers of traditional and digital securities through the entire asset life cycle from issuance to trading, clearing, settlement, and registry. It operates a fair and transparent marketplace in line with international best practices and principles of operations of financial markets. Upstream does not endorse or recommend any public or private securities bought or sold on its app. Upstream does not offer investment advice or recommendations of any kind. All services offered by Upstream are intended for self-directed clients who make their own investment decisions without aid or assistance from Upstream. All customers are subject to the rules and regulations of their jurisdiction. By accessing the site or app, you agree to be bound by its terms of use and privacy policy. Company and security listings on Upstream are only suitable for investors who are familiar with and willing to accept the high risk associated with speculative investments, often in early and development-stage companies. U.S. persons may not deposit, buy, or sell securities on Upstream. There can be no assurance the valuation of any particular company’s securities is accurate or in agreement with the market or industry comparative valuations. Investors must be able to afford market volatility and afford the loss of their investment. Companies listed on Upstream are subject to significant ongoing corporate obligations including, but not limited to disclosure, filings, and notification requirements, as well as compliance with applicable quantitative and qualitative listing standards.

Collectible products are akin to a digital sticker of an underlying artwork and should not be considered a financial investment; a security token, an e-money token, or a form of digital currency. Collectibles should not, therefore, be purchased by anyone seeking financial gain or with an expectation to profit from the purchase, ownership in the entity, dividends or distributions, sale or resale of a Collectible. By buying a Collectible, you agree that you are not doing so for investment purposes or for the purposes of obtaining a security or an appreciating asset. You understand that the benefit you receive for buying a Collectible is limited to supporting athletes, celebrities and other brands. You also acknowledge that ownership of a Collectible does not carry with it any rights, express or implied, including (without limitation) copyright, trademarks or other intellectual property or proprietary rights in and to the underlying artwork. The copyright to the digital artwork remains with the copyright holder.

Forward-Looking Statements
This communication contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential,” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified, and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) difficulties in obtaining financing on commercially reasonable terms; (ii) changes in the size and nature of our competition; (iii) loss of one or more key executives or brand ambassadors; and (iv) changes in legal or regulatory requirements in the markets in which we operate. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.