WESTLAKE, Texas - Charles Schwab (NYSE:SCHW), the financial services giant with $9.92 trillion in total client assets, announced today it will start piloting expanded access to the overnight trading session, including stocks in the S&P 500, Nasdaq-100, and additional exchange-traded funds (ETFs). This move extends the ability to trade 24 hours a day, five days a week, and follows Ameritrade's pioneering of 24/5 trading in 2018, which Schwab acquired in 2020.
The pilot program will begin with a select group of clients and is expected to roll out to all clients in 2025. James Kostulias, Managing Director and Head of Trading Services at Charles Schwab, emphasized the company's commitment to providing educational content and round-the-clock support to help clients navigate the opportunities and risks of overnight trading.
Schwab's trading platforms, Schwab.com, Schwab Mobile, and thinkorswim®, have also received a series of enhancements aimed at improving the trading experience. These include new features like positions on charts, an options chain gadget, an index monitor, analyst ratings, and the addition of money movement capabilities on mobile platforms. Upcoming features such as Walk Limit™ orders and a custom positions table are also in the pipeline.
Schwab's expansion of trading hours and platform enhancements underscore its position as a leading provider for a diverse range of investors and traders. The company offers a comprehensive suite of platform, product, and support capabilities, including desktop, web, and mobile trading platforms, a vast library of educational resources, specialized service and support, and a wide range of trading products.
This announcement is based on a press release statement and aims to provide traders with more flexibility and access to trading opportunities outside of standard market hours. Extended hours trading carries specific risks, such as lower liquidity and higher volatility, which Schwab aims to mitigate through client education and support.
Investors are advised to consider their individual circumstances and the risks involved with extended-hours trading, which may not be suitable for everyone. Schwab's trading services are subject to review and approval, and not all clients may qualify for all trading products offered.
In other recent news, Charles Schwab Corporation announced a regular quarterly cash dividend of $0.25 per common share and dividends on several series of outstanding preferred stock. The company also reported a 5% year-over-year increase in revenue to $4.8 billion in the third quarter of 2024. This strong performance was accompanied by a reduction in supplemental funding by $9 billion, improving the adjusted Tier 1 Leverage ratio to 6.7%.
Analysts from Jefferies, Goldman Sachs (NYSE:GS), Citi, and Barclays (LON:BARC) have updated their outlooks on Charles Schwab, with Jefferies raising its price target to $84 and maintaining a Buy rating. In addition, the company anticipates a 2-3% revenue growth for 2024 and plans to introduce new retail alternatives in the fourth quarter. However, due to potential macroeconomic uncertainties, Charles Schwab has adjusted its net interest margin expectations for the end of 2025.
Lastly, a leadership transition is underway at Charles Schwab, with CEO Walt Bettinger set to depart and Rick Wurster to assume the role in January 2024. These recent developments reflect the ongoing strategic and financial evolution of Charles Schwab Corporation.
InvestingPro Insights
Charles Schwab's recent announcement to expand its overnight trading capabilities aligns well with its strong market position and financial performance. According to InvestingPro data, the company boasts a substantial market capitalization of $131.51 billion, reflecting its significant presence in the financial services sector.
An InvestingPro Tip highlights that 15 analysts have revised their earnings upwards for the upcoming period, suggesting positive expectations for Schwab's financial performance. This optimism may be linked to the company's strategic moves, such as the expanded trading hours, which could potentially drive increased trading volumes and revenue.
Another noteworthy InvestingPro Tip reveals that Schwab has maintained dividend payments for 36 consecutive years. This impressive track record of consistent dividends underscores the company's financial stability and commitment to shareholder returns, even as it invests in new initiatives like the 24/5 trading pilot program.
Despite a slight revenue decline of 6.4% in the last twelve months, Schwab's financials remain robust. The company's gross profit margin stands at an impressive 96.78%, indicating highly efficient operations. This strong profitability position supports Schwab's ability to invest in platform enhancements and expanded services while maintaining its dividend consistency.
For investors seeking a deeper understanding of Charles Schwab's financial health and growth prospects, InvestingPro offers additional insights. The platform provides over 20 more tips for SCHW, offering a comprehensive view of the company's potential in the evolving financial services landscape.
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