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Night trading site to debut
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August 25, 1999: 10:28 a.m. ET
MarketXT, backed by Dreyfus and Discover, to begin after-hours service
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NEW YORK (CNNfn) - Dreyfus Brokerage Services and Discover Brokerage are launching after-hours trading for small investors through an electronic system expected to debut Wednesday night.
Discover Brokerage, the online unit of Morgan Stanley Dean Witter & Co. (MWD), and Dreyfus, a division of Mellon Bank Corp. (MEL), will offer trading in 200 popular stocks on the New York Stock Exchange and the Nasdaq from 6 p.m. to 8 p.m. ET. Regular trading on the major exchanges ends at 4 p.m.
The service will be run by New York-based MarketXT, the first nighttime trading service in what promises to be a crowded playing field. Trading will be held nightly, Monday through Thursday.
"We're giving investors the flexibility to manage their portfolio at their convenience and to see orders executed in real time," Discover Brokerage president Tom O'Connell said in statement Wednesday.
After-hours trading used to be available only to professional investors. But brokerages are racing to offer expanded trading for individual investors as the popularity of electronic trading takes off.
The New York Stock Exchange and the Nasdaq both are planning to offer night trading, although specific details are still being worked out. The Chicago Stock Exchange has said it plans to offer trading to smaller investors in October.
Already, online brokerage Datek Online offers extended-hours trading until 5:15 p.m. Online broker E*Trade Group and electronic trading system Instinet plan to offer after-hours trading beginning in September.
MarketXT's backers include Citigroup Inc. 's (C) Salomon Smith Barney, Herzog Heine Geduld, Bernard L. Madoff Investment Securities and Polaris Venture Partners. The full-service divisions of Morgan Stanley and Salomon Smith Barney also are expected to offer their clients access to the system sometime soon, the Wall Street Journal reported.
After-hours trading is considered particularly volatile because fewer shares are traded at night. Discover and Dreyfus said the system will feature "volatility alerts" that notify traders when a stock rises or drops 10 percent from its closing price.
MarketXT, formerly known as Eclipse Trading, was founded in 1997 by two former Securities and Exchange Commission lawyers.
Morgan Stanley Dean Witter shares fell 1-11/16 to 94-5/8 in early trading Wednesday. Mellon Bank stock fell 7/16 to 35-5/16.
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