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Ameritrade now offers all-night ETF trading

Stock traders who want to pull all-nighters can now do so through TD Ameritrade.

The second-biggest discount broker now lets customers buy and sell 12 U.S. ETFs 24 hours a day on weekdays. Clients in Asia will be among the beneficiaries, gaining the ability to trade U.S. products during their daylight hours. But Americans wanting to key off late-breaking news can participate, too.

TD Ameritrade says it’s working with Virtu to route and execute orders through this new all-night session.
The TD Ameritrade Holding Corp. headquarters stands illuminated at night in Omaha, Nebraska, U.S., on Sunday, Oct. 23, 2016. TD Ameritrade and its largest stakeholder, Toronto-Dominion Bank, are close to a deal to buy online brokerage Scottrade Financial Services Inc. for $4 billion, according to people with knowledge of the matter. Photographer: Sarah Hoffman/Bloomberg

When events such as U.S. elections or the U.K.’s 2016 vote to leave the Europe Union happen, “clients want to interact with the market, but they can’t because it’s not open,” said Steve Quirk, TD Ameritrade’s executive vice president of trading and education. “Almost 70% of the time, clients are doing their research and making their decisions at a time when they aren’t able to trade.”

While the NYSE famously rings a bell at 9:30 a.m. and 4 p.m. to mark the start and close of trading, the reality has long been that a lot of trading takes place outside those hours. Exchanges like NYSE Arca and the Nasdaq Stock Market are open from 4 a.m. to 8 p.m. every weekday. TD Ameritrade is expanding on that.

Few orders placed through retail brokers such as TD Ameritrade ever reach a public exchange like NYSE. They’re fed to firms including Virtu Financial and Citadel Securities, which execute the trades internally against shares they have on hand. And because those firms are highly automated, their computers should be able to complete orders at any hour of the day.

TD Ameritrade says it’s working with Virtu to route and execute orders through this new all-night session.

Initially, TD Ameritrade clients can trade 12 widely held ETFs including funds that track the S&P 500 and Dow Jones Industrial Average, Chinese shares and commodities. The company said it plans to offer more securities later.

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Trades must be placed as limit orders that set a price to buy or sell. If not executed by 8 p.m., orders expire.

“It’s just a continuation of the evolution of leveling the playing field for retail clients,” Quirk said. “The information for clients to do research and the technologies are there. We have 700,000 people interacting with us daily, well over a third through their mobile device. This has been the one disconnect. Think of it this way. I have a restaurant that’s lit up, I can see the menu, but I can’t buy anything. Now you can.”

Bloomberg News