Should A-share trading hours be extended given that they are significantly shorter than major global markets?

Question AI · How does the short trading hours of the A-share market trigger cross-market arbitrage?

In major global stock markets, the trading hours of the A-share market are much shorter, totaling only 4 hours.

Compared to the A-share market, major global stock markets have significantly longer trading hours. For example, the Hong Kong stock market trades for 5.5 hours, Japan’s stock market also for 5.5 hours. Additionally, markets like Australia, New York, Toronto, Singapore, and London all have trading hours exceeding 6 hours.

In fact, some mature stock markets have already broken through the limitations of intraday trading by setting up pre-market, after-hours, and night trading sessions.

Take the Nasdaq index as an example. Besides regular trading hours, investors can place orders during pre-market and after-hours sessions, making the actual trading time over 16 hours per day, nearly achieving “24/7” trading. In the future, Nasdaq’s trading hours may extend further from 16 hours to 23 hours to meet investors’ trading needs at all times.

Among major global markets, the A-share market’s trading hours are basically at the bottom. Besides the short daily trading hours, the A-share market also has the longest market closure times.

For example, during the Chinese New Year holiday, the A-share market is closed for over a week. During the “May Day” and “National Day” holidays, the market is closed for no less than three days. Additionally, holidays like New Year’s Day, Qingming Festival, Dragon Boat Festival, and Mid-Autumn Festival also see market closures. When including regular weekend closures, the actual annual market closure time for the A-share market is quite extensive.

Currently, the A-share market is the second-largest stock market by market capitalization globally. Based on liquidity, trading volume, and other data, it remains stable within the top three worldwide, making it a highly active market. From a medium- to long-term development perspective, the A-share market is accelerating its internationalization and marketization. In the future, trading hours, trading systems, and investor structures are expected to gradually align with those of mature international markets, moving onto the global stage more quickly.

As the A-share market accelerates its integration with international mature stock markets, its trading hours should also be aligned more closely. Given the current 4-hour trading day, this is still far from sufficient.

In my view, the future of A-share trading hours can be approached in three steps.

First, synchronize A-share trading hours completely with the Hong Kong market. That is, extend A-share trading hours to 5.5 hours, from opening to closing, aligning fully with Hong Kong.

Complete synchronization with Hong Kong’s trading hours helps prevent cross-market arbitrage. In practice, important policy announcements are often made after A-share market close. Since the Hong Kong market remains open, some arbitrage funds tend to flow into Hong Kong to digest policy information first. When A-shares reopen the next day, the impact of these policies on the A-share market diminishes, as smart funds have already positioned themselves in advance.

The mismatch in trading hours between A-shares and Hong Kong can lead to information asymmetry and facilitate arbitrage activities. Therefore, from a fairness perspective, A-share trading hours should be fully synchronized with Hong Kong.

Second, gradually align A-share trading hours with those of mature Western markets.

Currently, major Western markets like London and Frankfurt have trading hours exceeding 8 hours, averaging over 8.5 hours. In other words, these markets’ trading hours are more than double the current A-share trading hours.

From a medium- to long-term perspective, to truly integrate with international markets, the A-share trading hours should be extended to over 8 hours, matching those of Western markets. As the second-largest market by market cap globally, it should also have comparable trading hours.

Third, A-shares should gradually introduce pre-market, after-hours, or night trading to meet different trading needs.

Some mature markets are actively exploring “24-hour” trading. Nasdaq, for example, is extending its trading hours from 16 to about 23 hours, and this “around-the-clock” trading could become more common globally. To boost market activity and trading volume, the A-share market needs to add pre-market, after-hours, or night trading sessions. This would enhance liquidity and reduce risks associated with information and trading hour asymmetries.

Overall, compared to international mature markets, the A-share market’s trading hours are relatively short. A phased approach to extending trading hours—through three steps—can help the market better integrate with global standards, further enhancing its competitiveness and attractiveness.

Author’s note: These are personal opinions and for reference only.