The Taiwan Futures Exchange (TAIFEX) plans to offer after-hours trading from the fourth quarter this year, making it the first local exchange to do so, a TAIFEX official said yesterday.
In the first phase of the implementation, an after-hours trading session will run from 3:45pm to midnight, following the regular trading hours from 8:45am to 1:45pm. The total trading hours would be extended to 13 hours, 15 minutes from the present five hours.
The TAIFEX said other major markets already offer after-hours trading and Taiwan’s trading hours were significantly shorter than most other markets — 13 hours, 15 minutes on Singapore’s SGX MSCI Taiwan index futures, 8 hours, 10 minutes on Japan’s Nikkei 225 futures and 23 hours on the Dow Jones Industrial Average and S&P 500 futures in the US.
“Although after-hours trading volume is relatively small, it will send shock waves across the country,” TAIFEX chairman Andy Yeh (葉景成) said at a press briefing yesterday.
Yeh said while he had personally adopted a cautious attitude as to whether after-hours trading should be offered, since Financial Supervisory Commission Chairman Sean Chen (陳冲) had brought up the issue during a legislative session on Wednesday, the TAIFEX would follow government policy.
In the second phase, the after-hours session would run from 3:45pm to 4:30am the next day, with the total trading hours extending to 17 hours, 45 minutes, depending on market conditions and demand, the TAIFEX said.
The purpose of offering after-hours trading is to provide a hedging vehicle for traders, who will have more options and trading opportunities, it said.
Under the new plan, traders who do not participate in after-hours trading would not have their trades marked to market or have to make margin calls at the end of the session to avoid affecting or changing local investors trading activities and their daily routine.
To reduce costs, the TAIFEX said traders would be asked to place their orders online.
The previous day’s closing price would still be used as the reference price for the next day’s trading session and, as a result, after-hours trading would not affect the regular trading session opening price, TAIFEX said.
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