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Investors Gear Up for Longer Hours

June 4, 1999

NEW YORK (AP) _ They hunch over stock tables in the dead of night and troll the Internet at the crack of dawn for the hottest tips and rumors.

These investors aren’t content to buy and hold for the long term, and instead clamor to trade all day, every day.

Americans who have embraced do-it-yourself investing are providing a powerful push as the nation’s stock exchanges debate a history-making decision to extend their trading hours.

But some investors remain skeptical around-the-clock trading is necessary and the idea terrifies small-brokerage owners who face stretching their slim staffs.

In addition, the stock exchanges themselves fear volatile price swings in the hours when most investors are eating breakfast or kicking back in front of the evening news.

Acknowledging the uncertainties of such a big change, the New York Stock Exchange said Thursday it won’t extend its schedule until some time next year.

Still, investors large and small are gearing up for the change.

The loudest calls for extended hours come from investors on the West Coast, who feel locked out by U.S. markets’ current hours of 9:30 a.m. to 4 p.m. Eastern time, and day traders, who buy and sell stocks quickly, hoping to profit from price swings.

Reinhart Rentsch, an avid trader in New York, expects the extra hours will allow him to pounce on corporate news that is often reported in early morning or late evening.

``There are many advantages,″ he said. ``And for people who speculate in stocks, I think the advantages are even greater.″

That’s exactly what concerns more conservative investors.

Daniel Miller of Teaneck, N.J., considers himself a day trader, buying or selling two or three times a day. Nonetheless, he, too, is concerned about the push for longer hours.

Miller says he will trade more often, but he fears that the market will be flooded with orders from investors who haven’t thoroughly researched their trades.

``People who used to work 9 to 5 and then come home and do in-depth research will no longer be able to do so,″ he said.

Many professional traders now welcome the lull imposed by the 4 p.m. market close. The early evening hours provide them time to finalize paperwork, meet with clients for drinks or golf, and debate their course for the next day.

Small brokerages are particularly worried about stretching their resources to meet the demands of a longer session.

``We already work 12-hour days, so we’ll probably go to 15-hour days,″ said Alan Davidson, president of Zeus Securities Inc. in Jericho, N.Y., and head of the Independent Broker-Dealer Association. ``There’s really not much give here.″

If small brokerages are forced to hire more staff, Davidson said, many could go under, particularly since night trading is not expected to bring in much additional money.

That’s because, at least initially, trading would be restricted to a small percentage of all listed companies. The NYSE expects to allow trading in 500 of its 3,088 stocks during the extra hours. The Nasdaq Stock Market, which includes most of the nation’s biggest technology companies, plans to trade 100 of its largest stocks when it adopts longer hours as early as September.

By limiting trading to big, widely held stocks, the exchanges hope to protect investors from the volatile price swings that can occur when only a small number of people are participating in a market.

Karen Spero, a certified financial planner in Cleveland, acknowledges individual investors forced Wall Street to consider longer hours, but she believes only a small percentage will take advantage of it.

``Many people love the idea of making a change (in their portfolios) every day, but hardly anyone does it,″ she said.

Those who do are already finding more options outside traditional stock exchanges.

Instinet, an electronic trading system owned by Reuters Inc., now caters to big-money clients, but is exploring ways to open its service to individuals.

Another is CyberCorp., which plans to offer extended hours to clients of its online brokerage unit CyberBroker.

``Some of the most important company news announcements take place before or after hours,″ said founder Philip Berber. ``Until now, that’s been the exclusive domain of institutional traders, and we don’t think it should be.″


EDITOR’S NOTE: Associated Press Writer Beth Gardiner in New York contributed to this story.

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