As an investor, you may have wondered why the stock market closes at night. After all, the world is a global marketplace, and there are always buyers and sellers somewhere. So why do we have to wait until the next day to trade?
The answer lies in the history of the stock market. In the early days, trading was done face-to-face on the floor of the exchange. This meant that trading could only take place during the hours when the exchange was open. As technology advanced, trading moved from the floor to computer screens, but the hours of operation remained the same.
But why not keep the market open 24/7? There are a few reasons. First, the market needs time to process and settle trades. If the market were open all the time, it would be difficult to keep track of who owns what and when trades were executed. Second, having set hours of operation allows investors to plan their trades and manage their risk. If the market were open all the time, it would be difficult to know when to buy or sell.
Another reason why the market closes at night is to give investors time to digest news and information. If the market were open all the time, investors would be constantly bombarded with news and updates, making it difficult to make informed decisions. By closing at night, investors have time to review the day’s events and make informed decisions about their investments.
So, while it may be frustrating to have to wait until the next day to trade, the market’s hours of operation serve an important purpose. They allow for efficient processing of trades, help investors manage risk, and give investors time to digest news and information.
