Why Is The US Stock Market Open 6.5 Hours A Day?

The New York Stock Exchange will have an abbreviated trading session from 9:30 a.m. ET to 1 p.m. ET this Friday following a Thanksgiving Day closure. The holiday-shortened trading session may seem atypical for today’s traders, but NYSE trading hours haven’t always been 9:30 a.m. to 4 p.m.

Trading Timeline

Way back in 1871, the NYSE set its first regular daily trading hours to begin at 10 a.m. and end some time between 2 p.m. and 4 p.m. These market hours were held six days a week from Mondays through Saturdays, with the market remaining closed on Sundays.

In 1887, the hours were adjusted to 10 a.m. to 3 p.m. Monday through Friday and only 10 a.m. to noon on Saturdays.

In fact, it wasn’t until 1952 that the NYSE closed on Saturdays. In addition to eliminating Saturday morning trading, the NYSE extended the Monday through Friday sessions by 30 minutes from 10 a.m. to 3:30 p.m.

Trading was extended by another half hour to six hours in 1974, still opening at 10 a.m. but closing at 4 p.m.

The current 6.5-hour regular trading session today’s traders know and love was first implemented in 1985 when the NYSE began opening 30 minutes earlier at 9:30 a.m. and closing at 4 p.m.

Extended Hours

In 1991, the NYSE took things one step farther, launching extended-hours trading from 4 p.m. to 5:15 p.m. Extended hours trading was initially limited to institutional investors, but the rise of electronic trading eventually extended access to retail investors as well.

Today, the NYSE extended trading hours begin at 4 a.m. and end at 8 p.m. ET. There are 6.5 hours of regular NYSE trading on the typical day, but up to 16 hours of extended trading each day.

Peter Asch, corporate communications and archivist for NYSE, told Benzinga a number of considerations went into determining the exchange's current hours to maximize market efficiency.

“Our trading hours are set by NYSE Rule 51, but the trading hours developed over time from our founding in 1792 for a variety of reasons from volume, number of securities, clearing requirements, paperwork issues, and the role of technology,” Asch said.

Looking Ahead

For traders who want to get a head start on updating their calendars for the next couple of years, the NYSE has already published all of its major holidays and unique trading hours for the 2019 and 2020 calendar years on its website here.

Related Links:

Trading After-Hours Can Be A Dangerous Game

This Day In Market History: NYSE Launches After-Hours Trading