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2 hours, leveraging the bull market? The market game behind the extended trading hours of the Shanghai Stock Exchange
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"Ding-" mobile phone push news pop-ups, in the late autumn afternoon to break the calm of the office, "Shanghai Stock Exchange extends trading hours" a few big words eye-catching, like a stone into the calm lake, instantly stirred up a thousand waves, circle of friends, shareholders rushed to tell each other, some cheered, some calmly watched, all kinds of analysis and prediction flying all over the sky, and the most exciting is the hopeful question: "Bull market, is it really coming?" ”
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On the evening of October 6, the Shanghai Stock Exchange issued an announcement that it decided to adjust the declaration time of the designated transaction to 9:15 to 11:30 and 13:00 to 15:00 on each trading day, compared with the previous arrangement, it was extended by 2 hours. Others interpret it as a move to activate market liquidity, aiming to inject a shot in the arm in the face of a sluggish market
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Extended Trading Hours: Is It "Timely Rain" or "Booster"?
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In fact, this is not the first time that the Shanghai Stock Exchange has adjusted trading hours, looking back on history, each adjustment carries the determination of the regulator to respond to changes in the market environment and reform, in the early 90s of last century, China's stock market was founded, and the trading time was only a short 2 hours, with the expansion of market size and the increase in trading demand, The trading hours have been gradually extended to 4.5 hours, and this adjustment, which further extends the trading hours to 6 hours, is undoubtedly hoping to provide investors with more ample operating space and improve market activity and liquidity by increasing the trading hours
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So, can the extension of trading hours inject "living water" into the market and even leverage the bull market as expected? The answer may not be a simple "yes" or "no"
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Proponents believe that extending trading hours can provide investors with more flexible operating strategies, reduce transaction costs, and improve market efficiency, especially for short-term investors, longer trading hours mean more trading opportunities, and can operate in a more timely manner according to market changes, and extending trading hours is also conducive to integrating with the international market and attracting more foreign capital to enter the Chinese market
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Opponents are worried that extending trading hours may exacerbate market volatility, which is not conducive to the long-term stable development of the market, and longer trading hours mean that investors need to spend more time and energy to keep an eye on the market, which is undoubtedly a burden for ordinary investors, and may even lead to an increase in irrational investment behavior
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The numbers don't lie: historical trading time corrections and market movements
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History is always strikingly similar, yet full of uncertainties, and in retrospect, there has been no shortage of cases around the world where trading hours have been adjusted, and their impact on the market has not been static
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In 2000, the United States Nasdaq stock exchange extended its trading hours to 16 hours, hoping to improve market competitiveness, but after extending the trading hours, the Nasdaq index did not rise significantly, but continued to fall in the context of the bursting of the Internet bubble
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Similarly, in 2011, the National Stock Exchange of India also extended trading hours by one hour, but the market reaction was similarly muted, with no significant volume and price fluctuations
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These cases seem to remind us that the adjustment of trading hours is not a panacea, and its impact on the market is constrained by a variety of factors, such as the macroeconomic environment, policy environment, investor sentiment, etc., and it is too hasty to simply equate the extension of trading hours with a bull market
Rational and cautious decision-making: how should investors respond?
In the face of various voices in the market, investors should remain rational and make prudent decisions, and the extension of trading hours means different opportunities and challenges for different investors
For experienced professional investors, they have a sharper sense of the market and a more mature trading strategy, and extending the trading time provides them with more room for operation, which also means more profit opportunities
For inexperienced ordinary investors, extending trading hours requires more caution, blindly following the trend, frequent operations, it is likely that the gains outweigh the losses, and more importantly, to establish a correct investment philosophy, do not regard the extension of trading hours as a shortcut to "get rich overnight", but should be regarded as a long-term learning and investment process
Conclusion: Market Game, What is the Future?
Extending the trading time, like dropping a key chess piece on the chessboard of the capital market, its ultimate impact remains to be tested by time, no matter how the market changes, investors should remain rational, prudent decision-making, and seek long-term stable investment returns under the premise of controllable risks
As a senior market analyst put it: "The extension of trading hours only provides a freer stage for the market, and the final performance depends on the choices and actions of each participant."
Where will China's capital market go in the future? Let's wait and see
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