Amex, Other Exchanges Plan Extended Hours

NEW YORK — The American Stock Exchange, Chicago Board Options Exchange and Cincinnati Stock Exchange announced plans Monday to start a computerized, nighttime trading market for stocks and stock options.

As does an after-hours trading plan announced last week by the New York Stock Exchange, the proposal aims to regain some of the business in U.S.-listed issues captured by foreign competitors--especially the London and Tokyo exchanges--that operate while U.S. stock markets are closed.

“The global marketplace is here, and there is no turning back the clock,” said James R. Jones, Amex chairman. “Those that seize the opportunity now to provide investors with a market at any time, will emerge as the major players in the securities industry of the future.”

Exchange officials said their system could be operating in two to three years, although many details need to be worked out. The plan must be approved by the Securities and Exchange Commission.

The system would operate between 6 p.m. and 6 a.m. Eastern time. Stocks now trade from 9:30 a.m. to 4 p.m. and options from 9:30 a.m. to 4:10 or 4:15 p.m.

Reuters Holdings PLC will provide the networking that links brokers and other customers with a main computer to be built by the CBOE.

The CBOE and Amex would provide a market in their stock options, while the Cincinnati Exchange would provide trading in stocks listed on that regional exchange.

Options are financial instruments that give holders the right to buy or sell 100 shares of a stock at a designated price for a certain amount of time. Options can apply to stocks listed on exchanges or traded over the counter.

The deal is a sign of cooperation at a time of growing competition among exchanges that handle options. A new federal rule provides for multiple listings of stock options, which are now assigned to particular exchanges.

Under the computerized nighttime system, the marketplace that establishes itself as the primary exchange for a particular issue will handle the stock option in the after-hours session.