• Number of public holidays at Deutsche Börse decreased
• Crypto and Forex trading least time constrained
• The trading volume is usually very thin on public holidays
Which exchanges are closed on which days? On which public holidays – and at what times – is trading on the capital market still possible? What are the advantages and disadvantages of holiday trading, and what do investors have to pay particular attention to? Many traders have certainly asked themselves these questions – here are some answers.
German trade is restricted on these public holidays
The decisions made by Deutsche Börse regarding its opening times are decisive for all stock exchange trading in Germany, since the electronic trading platform XETRA, which belongs to Deutsche Börse, is by far the largest German stock market place. In general, Deutsche Börse has significantly reduced the number of stock exchange holidays in recent years. There are only seven public holidays: New Year’s Day (always January 1st), Good Friday (in 2022 this holiday fell on April 15th), Easter Monday (April 18th, 2022), Christmas Eve (December 24th), on the first and Boxing Day (December 25th and 26th) and New Year’s Eve (December 31st).
A few years ago there were significantly more stock exchange holidays in Germany, namely Ascension Day, Whit Monday, Corpus Christi and the Day of German Unity (October 3). Although these public holidays are public holidays in Hesse, trading is now taking place in Frankfurt on these days, not least because Wall Street is open on these days. However, the trading volume is significantly lower in Germany on these days, as many market players, including the big banks, take a break on those days. In addition, stock exchange trading is shortened on official public holidays: Trading on the Frankfurt Stock Exchange usually runs from 8:00 a.m. to 10:00 p.m. (XETRA: 9:00 a.m. to 5:30 p.m.), but on these public holidays it is already 8 p.m :00 a.m. Close of trading.
US stock exchanges: now more public holidays than in Germany
The US stock markets have many national commemorative holidays: Martin Luther King Day (near or on January 15), Washington’s Birthday (third Monday in February), Memorial Day (last Monday in May), Independence Day (July 4), Day of work (first Monday in September) and Thanksgiving (fourth Thursday in November). Good Friday and Christmas Day are the only non-trading holidays of Christian origin. In addition, the stock exchanges remain closed on New Year’s Day. On many other Christian holidays, such as Easter Monday, Whit Monday or Boxing Day, Wall Street trades against it.
Most stock market holidays are meanwhile in Asia. Stock exchanges in Shanghai and Hong Kong are closed for a full week during the Chinese New Year, which falls between January 21 and February 21. Even during the Chinese national holiday at the beginning of October, there was no trading on the stock exchanges in the People’s Republic for several days. Japan also has a variety of public holidays, including Coming of Age Day (January 10), Founding Day (February 11), Children’s Day (May 5), Sea Day (July 18). ) and Sports Day (October 10).
Big differences in holiday trading between asset classes
However, the effects of the holidays on trading differ depending on the asset class. The crypto business is not affected at all by public holidays. Bitcoin, Ethereum, Dogecoin and Co. are traded 24 hours a day, seven days a week. Even outside the opening hours of the stock exchange, cyber currencies sometimes show high volatility despite lower trading volumes.
Forex trading is now almost entirely online and therefore independent of stock exchange opening hours. The respective currency pairs can be traded even on national holidays – throughout the week from Sunday 10:00 p.m. to Friday 11:00 p.m. without any trading interruptions. However, off-hours forex trading is thin and volatility is low due to less market-moving information. For example, forex traders who typically trade on news reports may miss these trading hours for guidance. In addition, the analysts do not publish any new forecasts on stock exchange holidays.
Trading stocks on public holidays is even more difficult. Although there is also OTC trading (over the counter, i.e. not taking place on the stock exchange), this is usually relatively less capital-intensive, which causes the spreads between buying and selling prices to skyrocket. Stock trading is not only not recommended on the holidays, but is often technically impossible. In addition, bond trading is the most restricted in terms of time, with the official buying and selling of bonds on the German stock exchange only taking place between 8:00 a.m. and 5:30 p.m.
Pros and Cons of Trading on Holidays
For traders who want to get involved in the capital market even on the holiday, it is of great importance to become aware of the main players in trading on these days. It is usually the large international investment banks that use the holiday break on the capital markets to realize their positions with profits or to adjust them to new market conditions.
As a result, there can be surprisingly large moves in the FX market, as well as on weekends and public holidays, without new news or significant resistance. Patient traders who are willing to take risks can achieve trading success on such holidays – despite the above-average spreads. However, some traders do not like such exciting “flying blind” and take a break on public holidays to focus on the main trading hours. Incidentally, the largest trading volumes in all asset classes – from bond markets to stock trading to crypto and foreign exchange business – are observed between 1 p.m. and 5 p.m. CET. In this time interval, trading takes place both on the European stock exchanges and (from 3:30 p.m.) in the USA. Market-moving news is plentiful and spreads are particularly thin, making these four hours of interest to many traders.
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