Regulator publishes guidance on extended trading as it comes to Canada

TORONTO – The Canadian Investment Regulatory Organization (CIRO) has released guidance on the risks and benefits of extended trading hours. CIRO notes that extended trading can provide more flexibility for investors to react to news outside of regular trading hours, but it also brings risks.

Extended trading hours allow investors to buy and sell securities outside of the typical market hours of 9:30 a.m. to 4 p.m. Eastern Time. This can potentially increase trading volumes but may also result in lower volumes and greater price volatility. Additionally, market reactions to earnings reports, economic data, or breaking news could be more pronounced during extended hours.

Kevin McCoy, CIRO's senior vice-president of market regulation, observes that other countries are also exploring extended trading, with the U.S. leading the way. Nasdaq Stock Market plans to offer trading 23 hours a day, five days a week, starting in early December. Meanwhile, CIX Trading Inc., a new Canadian marketplace, has already introduced extended trading hours and intends to expand them further.

McCoy advises retail investors to carefully consider whether extended trading is suitable for them, emphasizing the importance of making informed decisions.