US regulator clears path for round-the-clock stock trading

US Commodity Futures Trading Commission (CFTC) Commissioner Michael Selig has endorsed regulatory action that would facilitate extended trading hours for individual equity securities using perpetual futures contracts. The approval signals growing acceptance within American financial regulators for mechanisms that would allow trading outside traditional market hours.

Perpetual futures contracts are derivatives that enable investors to speculate on or hedge stock price movements without owning the underlying shares. Unlike conventional futures with expiration dates, perpetual contracts can be held indefinitely, making them suited for round-the-clock trading environments.

The regulatory advancement addresses long-standing limitations in US equity markets, which traditionally operate during set daytime hours. Extended trading windows could potentially increase market liquidity and accessibility for global investors across different time zones, particularly benefiting participants in Asia and other regions.

The move reflects ongoing evolution in financial markets as regulators weigh innovation against oversight concerns. The CFTC's action would need to be finalized through additional procedural steps before traders could access 24-hour stock trading through these instruments.

Experts note that perpetual futures trading already operates in cryptocurrency markets, where round-the-clock activity is standard. Applying similar mechanisms to traditional equities represents a convergence between conventional financial markets and newer digital trading platforms.