Hedge fund billionaire and Mets owner Steve Cohen is investing in a startup that wants to make 24/7 equity trading a reality – capitalizing on the wheelchair trading craze that has developed. intensified during COVID lockdowns.
Amid Reddit boards stuffed with trading tips that have targeted battered stocks left for dead only to see companies – like GameStop and AMC – come back to life, Cohen and 24 Exchange are betting the excitement is there. to support 24 hours a day, 7 days a week trading.
Cohen is leading a $ 14.25 million funding round for 24 Exchange through his fintech venture capital firm Point72 Ventures, the two companies said on Wednesday. The company is seeking to effectively become its own version of an exchange similar to the New York Stock Exchange of the NASDAQ stock market.
In the United States, trading in stocks and securities is generally limited to weekdays between 9:30 a.m. and 4:00 p.m. Eastern Time, with limited opportunities to buy and sell stocks before and after the daily sessions at Wall Street. There is no exchange on weekends or federal holidays.
Point 72 Ventures partner Pete Casella told the Wall Street Journal that there are a large number of lay traders with day jobs who will be eager to take advantage of the opportunity to buy and sell securities from their homes. at all hours of the day.
âWhen you look at the growth in stock trading over the past couple of years, that has largely been the increased role of retail,â Casella told The Journal. âThese are people who have daytime jobs, so they want to trade at night and on weekends.â
Skeptics say professional Wall Street traders are widely opposed to the idea of ââtrading seven days a week, 24 hours a day, not least because of the low volume and the potential volatility that could rock the markets.
Earlier this year, large Wall Street investment firms were rocked by small retail investors who banded together on Reddit to raise the share price of GameStop, a physical video game retailer.
Using the Reddit “wallstreetbets” chat room, investors used small sums to drive the share price up over 2,000%, resulting in massive losses for some leading companies who sold the stock short, or bet it would fall.
One such company, hedge fund giant Melvin Capital, closed its short position on GameStop at a loss. Cohen’s Point72 provided Melvin Capital with an injection of $ 750 million in emergency cash in light of its losses with GameStop and other short bets.
Already, crypto enthusiasts can use peer-to-peer networks to trade digital currencies around the clock. And since launching last year, the Bermuda-based 24 Exchange has offered users a platform to trade. both cryptocurrencies and foreign currencies.
In October, it applied for approval from the Securities and Exchange Commission to operate a 24-hour stock trading service in the United States. The SEC approval process could take months.
The investment in 24 Exchange is Point72 Ventures’ second major foray into the crypto space in recent months.
In August, Cohen’s company, which manages $ 22.1 billion, led a $ 21 million fundraiser for Messari, the data startup that offers crypto buyers an online database through a library. open source.