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November 1, 1999

Traders Balk at Extended Trading, Citing Potential Market Problems

By Staff Reports

Despite the headlong rush by some broker dealers and electronic communications networks into after-hours trading, the vast majority of respondents in a poll conducted by the Security Traders Association said they are opposed to extended trading hours.

A slight majority cited liquidity as the biggest potential problem in extended trading hours. A minority thought price volatility would be the biggest source of concern.

The four-question poll on after-hours trading, conducted from Sept. 8 through Sept. 17, was sent to the STA's roughly 7,700 members. About 13 percent, or 1,010 members, responded.

Past Efforts

Lee Korins, president and chief executive of the STA, said the members have noticed liquidity and volatility problems in past efforts to create late-trading sessions. Korins said STA members have no reason to believe these problems have been solved.

"That's a big part of the reason market professionals are so strongly in favor of a coordinated approach to extended hours," the STA president said.

All told, roughly 77 percent, or 777 respondents, were in favor of an industry-wide coordinated approach to after-hours trading. A mere 15.5 percent or 157 respondents, said that each exchange or ECN should begin trading after normal market hours "when each feels it is ready."

In June, the Securities and Exchange Commission convened a meeting of the U.S. stock exchanges and other market participants. The SEC was examining a coordinated plan for extended trading hours.

STA Poll on Extended Trading

Do you favor or oppose extended trading hours?

Favor: 111 (11 percent)

Oppose: 839 (83 percent)

Undecided: 60 (6 percent)

Do you believe extended trading hours will require you to work additional

hours; or will it result in increased hiring?

Longer hours: 285 (28 percent)

Increased Hiring: 91 (9 percent)

Both: 549 (54 percent)

Don't Know: 85 (8 percent)

Total responses: 1,010 (13 percent of membership)

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