When the stock market is open, I can't keep my eyes off of it. Sometimes I am sure I see God in the last five minutes of a market session. I feel the religious supplicant's sense of utter surrender to the Divine Will, watching the awesome movements of that great sea. When that Invisible Hand moves all prices to where He or She knows that they ought to be, I am moved as correct prices are "discovered" and revealed throughout the day. To be in the market has seemed to me to be a way of aligning one's life with God's Will, through the full commitment and surrender of one's financial assets to the Universe's Plan.
As you can see, I love the stock market. Perhaps too much. So when word got out that as soon as September, market trading hours are being extended so Joe Six-Pack can trade at all hours of the day and night, you would have expected me and my stock-broker colleagues to be thrilled. The great communion with the All could be extended, the giant roller coaster ride, our life's enjoyment, would go on into the night, would not end on Fridays ... Hallelujah!
Instead I felt a giant knot form in my stomach. Have you ever wondered why the trading day is only six and a half hours long? I don't anymore. It is now painfully obvious to me. Last year I became an options trader, buying in and out of the volatile stocks of e-commerce companies, which we gambling addicts call simply "The Internets." First Dell was my baby. Then I gave that up because it just wasn't volatile enough. I ratcheted my nerves up a notch higher to AOL. My tolerance for huge market movements increased. So I moved on to Amazon, and then Yahoo.
The best thing you can hope for as a day trader is that you have a really bad first trade and lose some money. That way you will learn to respect the market. In my first trades I made $3,000 in a week. Total time spent in trading: possibly five minutes.
Just as no one wants to ski on a beginner's slope after they've successfully taken on a black diamond, my tolerance to volatility became more and more an intolerance of stability. My grandparents would have been thrilled to get a 10-point move in a stock price over the course of a year. But for me now, a mere 10-point move in a day just wasn't enough to get me excited. Next stop Theglobe.com, and then CMGI. When the market did good by me I was happy. When it reversed on me I was despondent. I loved and hated my stocks with a passion. My moods were completely at the mercy of the movements of the stock market, a force over which I had no control.
Looking back at that first set of trades, my first options positions, which I had been so happy to sell for a $3,000 profit -- those 37 Amazon call contracts -- would have been worth almost $650,000. Not bad for the approximately $15,000 I'd paid for them.
In the meantime, after my initial exuberant profit taking, I began a long and exquisitely horrible streak of losses, getting on the wrong side of my precious Internets. I netted out the year with a loss of about $20,000. Just as a point of reference, my yearly salary is about $30,000.
The point, though, isn't really about the money. It's about what happened to my mind and to the minds of others like me in this heated, schizophrenic marketplace. In the passion of my addiction I would absolutely hate the thought of an approaching weekend. For two days I was to live in suspense, not knowing what outcomes I would find on Monday -- it was more than I could bear. As the session ended each day, I sat transfixed in front of my computer screen, eating popcorn and screaming, as if the market makers could hear my pleas through my computer terminal. And then trading was over, leaving me with a sense of purposelessness until the next morning, when it would start again.
And it isn't just me. In my line of work you talk to a lot of trading junkies. In fact a lot of the brokers are market addicts. I never went to a shrink because, after all, I can stop any time I want to. Right?
I talked to a man who had margined his account to the hilt so that he could buy Internets. Margining is using the equity in your account as collateral, against which to borrow, so you can buy more shares of stock. When the stock prices go below a certain point, the "investor" must put up big bucks in cash or sell off his or her stock to cover the debt, at a tremendous loss. That's what happened to this guy. He bought all the sexy names. They crashed. He had to sell. He lost everything he had, about $500,000. Six months later he sold a house, got another $100,000 together and did the same damn thing. "What will I tell my wife?" he said between his sobs.
Another client, a very sweet lady, called to ask for a quote on Amazon. "I love and hate that stock" she said. When I asked if there was anything else I could do for her she said, "Get me some vodka and some Valium." She wasn't kidding. And a common question from clients was "How can I get in on after-hours trading?"
After a few months of this emotional roller-coaster ride, I began to place a premium on my peace of mind. By then I was only at ease when the market was finally closed and no more fluctuations were possible. Those of us who have come out on the other side have cut off Internet access to our accounts, to more easily resist the temptation to trade. Like members of drug addiction programs, we make up rules: No doubling up when the price drops; put in stop orders and then don't look at it again, and on and on. We would rather not know how our accounts are doing, moment to moment, as a gesture toward our sanity.
The idea of extending market hours means that people have been lobbying for more trading in a given day. That the public as a whole can't squeeze enough into a mere six and a half hours. They want more stimulation, more movement, more trades and ultimately less of a life.
Our forebears, in their wisdom, created a marketplace that was open only for a fraction of the day. I believe they did this so that people would have time to consolidate their thoughts between market sessions; so that they would have a life. There is more to life than the market. There are 24 hours in a day, during most of which the otherwise all-consuming stock market should be closed. Weekends are for more than just anticipating the market movement on Monday morning.
Some of these wise old forebears even created rules 80A and 80B, God bless their hearts, which halt trading to different degrees when the market becomes too volatile. This is so traders have a chance to think and take stock of the situation before they react foolishly and the whole sand castle comes crumbling down. Closing the market at 4 p.m. Eastern time has much the same effect. It's a way of saying: Go home. Get some sleep. Think before you act.
Extending trading hours carries much the opposite message. How can we justify this change, this enabling, indeed promotion of a culture-wide nation of gambling addicts, from sea to shining sea? Does anyone truly believe that the current length of the trading day is not sufficient for the needs of serious (read: long-term) investors? No. It is only the day traders who stand to "benefit" from the extended trading day. Let's take responsibility for our corporate actions, and take the bottle and the car keys away from the alcoholics.
Outside my window, as I am writing this, a spring thunderstorm overtakes everything the eye can see. Sheets of rain pour down from the blackened sky. A violent wind picks up as it discharges, forming a gushing river in the street in front of my house. The violence of the storm threatens to carry everything away, in its intoxicating splendor. Someone shut the windows.
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