City traders ask for shorter market hours to boost efficiency and fight stress
Traders association proposes a reduction to operating hours of 90 minutes
City traders have asked the London Stock Exchange (LSE) and other European bourses to consider shorter market hours to improve efficiency and liquidity, with the added benefit of reducing stress and fatigue for traders and making the profession more family-friendly.
In a joint letter to the LSE and other European trading venues, the Association for Financial Markets in Europe (AFME) and the Investment Association requested a review into equity market opening hours across Europe to shorten operating hours by 90 minutes.
The group said a reduction of 90 minutes in the European trading day would “create more efficient markets, benefiting savers and investors.” It added that the first hour of trading often attracts little liquidity and, therefore, is a more costly window in which to do business, while the final hour attracts around 35 per cent of total daily volume.
European markets have some of the longest operating hours in the world. At 8 and a half hours, they compare with 6 and a half in the United States and just 6 in Asia. Traders are expected to be at their desks long before, and after the market opens and closes.
The group is requesting that markets operate between 0900 and 1600 GMT rather than the current hours of 0800 to 1630 GMT.
“A shorter trading day would not only improve market structure but would also go a long way towards building a more diverse trading floor and fostering better mental health,” said April Day, managing director, head of equities at AFME. “Equities trading risks lagging behind a wider financial services industry push for more diversity and inclusion unless the long trading day is tackled by an industry-wide approach.”
Typically, trading jobs in the city have been dominated by men, not least because of the intense working hours and extremely limited flexibility.
The association said this has been identified as a key obstacle in recruiting and retaining more diverse talent, in particular for those with family or caring commitments, and said it hoped a shorter day could lead to improved work-life balance for city workers.
“We have heard many deeply moving stories of traders’ mental health and personal life being impacted by their working hours,” said Galina Dimitrova, director of capital markets at the Investment Association. “Whilst it is no silver bullet, we hope this European-wide review could start to lead to a step change in more efficient markets to the benefit of savers and those who operate them.”