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April 30, 1999

Longer Trading Days Predicted by Berkeley

By Staff reports

Nasdaq traders, harried by the stress of regular trading hours, may have to prepare for more stress and longer working days.

With the New York Stock Exchange mulling extended trading hours, and several upstart brokers promising after-hours trading to their retail customers, a move by Nasdaq to follow suit is clearly being influenced by the competition.

Nasdaq President Alfred Berkeley has predicted that the regular Nasdaq trading day will extend to ten hours or more.

"We will extend our hours, and we think the New York [Stock Exchange] will extend their hours as well," said Berkeley, in a speech to the Council of Institutional Investors in Washington. The regular trading session on both exchanges currently runs from 9:30 a.m. to 4:00 p.m. (EST).

Whatever Nasdaq decides is not likely to be binding for individual firms. "It's unlikely we would force firms to extend their hours if they don't want to," Berkeley said. Nasdaq's decision would be subject to review by the Securities and Exchange Commission.

Still, some Nasdaq traders said privately that competitive pressures would force some reluctant players, particularly smaller regional desks, to trade longer hours.

While the Big Board considers opening at least 30 minutes earlier, Nasdaq is debating an even earlier opening, at 8 a.m. or 8:30 a.m., and staying open later. "The consensus is we probably ought to stay open until 9 p.m. [EST]," giving investors on the West Coast the opportunity to trade until 6 p.m., Berkeley said.

A spokeswoman for the Big Board said the exchange is still looking at its options, and "nothing definitive" is planned yet on extended trading hours.

It is possible today of course to trade Nasdaq stocks around the clock. But it is not well suited to individual investors. As Nasdaq considers extended trading hours, Berkeley said that the exchange must consider whether it will allow trading in market and limit orders, as well as principal and agency orders.

Another question is whether to provide firm quotes and two-sided quotes, Berkeley said. Still another consideration he raised: Should Nasdaq utilize an electronic communications network for the extended trading session?