Money Stuff: LSE Will Trade 22.83 Hours a Day

Most stock exchanges run on old-fashioned human timeframes. The exchange opens after breakfast, it trades for a while, and then it closes so people can wrap things up, organize all of their trade tickets and leave in time for dinner. Several important exchanges close for lunch. These exchanges all started as trading floors where humans met to trade stocks and wrote down trade tickets by hand; those humans needed time to get organized and also to eat.

Obviously now the way you expect to trade stock — or crypto or sports bets or anything else — is by clicking a button on your computer or phone. Your computer does not need a lunch break. You might intuitively assume that it doesn’t need a pause to organize the day’s trading and reconcile its records, either. “What, when I sell you stock, the computer takes the stock out of my account and puts it in your account; that should happen instantly; it doesn’t need to later go back and update all the records to reflect the day’s trading.” There is a sense that the old human rhythm of the trading day is outdated, and a push — caused in part by the rise of active retail trading, in part by globalization of stock markets and in part by the example of crypto — for continuous 24-hour-a-day, seven-day-a-week electronic trading.

Still that seems sort of mean. The computers can do a lot of the trading, but humans still need to supervise them; those humans can eat at their desks, I guess, but they need to sleep eventually. Also it turns out that the systems for keeping track of stuff — for financing and reconciling and settling trades — are a bit more complicated than you’d intuitively assume, and the computers would appreciate a little pause to get their books in order.

Anyway here’s a press release from the London Stock Exchange:

London Stock Exchange today announced plans to launch London Stock Exchange 24 (LSE 24), a new 24/5 trading venue to support the next generation of digital, algorithmic and agentic trading.

LSE 24 is designed to support near-continuous trading from Monday to Friday, giving global investors greater flexibility to respond to market events, access liquidity across time zones and manage risk. The venue, which will be built on LSEG’s trusted financial market infrastructure, complements existing market structures by preserving the resilience and integrity of regular trading hours, while opening new opportunities for participation outside the traditional trading day in the UK. It will operate separately from the London Stock Exchange’s Main Market, which will continue to operate its existing trading hours.

A delightful footnote clarifies:

London Stock Exchange 24 will operate from 17:00 to 07:50 with a 30-minute pause between 18:30 and 19:00 to apply End of Day processes. Trading will continue on the London Stock Exchange’s Main Market between 08:00 and 16:30.

This is conventionally called “24/5” — trading 24 hours a day, 5 days a week — but of course it isn’t. The main market is open 8 a.m. to 4:30 p.m. (8.5 hours). The after-hours market is open 5 p.m. to 7:50 a.m. (14 hours and 50 minutes) — with a half-hour break after the main session ends and a ten-minute break before the next one starts — except it’s paused between 6:30 and 7 p.m. “to apply End of Day processes,” so it actually trades for 14 hours and 20 minutes. So a total of 22 hours and 50 minutes of trading per day. 

All of this stuff also involves blockchain — “LSE 24 will leverage LSEG's Digital Securities Depository (DSD), … [which] creates the foundation for the digitisation of issuance, settlement and asset servicing,” etc. — and I suppose the appeal of putting stocks on the blockchain is that eventually it will allow for instantaneous settlement, cut out all the end of day reconciliation processes, and allow, you know, 23/5 or 24/5 or even 24/7 trading. The blockchain doesn’t need lunch.

The old-fashioned theory is that, if your company has borrowed a lot of money and can’t pay it back, you will have a hard time borrowing more money. Potential lenders will be like “why don’t you pay back the new loans before we lend you more money?” Your existing loans will probably have covenants limiting your ability to borrow more money. Those loans might also be secured by liens on all of your assets, so the lenders get first dibs on the assets if you can’t pay them back. This is all pretty intuitive and how it is supposed to work: The people who loaned you the money expected to get paid back, and they wrote contracts to make it more likely that they’d get paid back.

The edgy postmodern theory is that you can pretty much always find some way around those contracts: There is always some maneuver you can use to move some assets out of reach of your creditors so you can borrow more money, some narrow path through the covenants that will allow you to borrow more money at the expense of your existing creditors. This is honestly kind of weird, and I am exaggerating a bit — not always  — but it does come up a lot. These maneuvers — borrowing new money in ways that extract value from existing lenders — are generally called “liability management exercises,” or LMEs, and they are why debt lawyers can make like $30 million a year now. 

This is, broadly speaking, (1) good for the lenders providing you new money (they get reasonably good collateral and a high interest rate) but (2) bad for creditors overall: It is better for lenders in expectation if loans are predictably paid back, and worse if there is always some trick available to take collateral from existing creditors and give it to new ones.

One way that lenders push back on this is by sticking together: If you run into financial trouble, all of your lenders could get together and agree not to cut any side deals with you that will advantage some of them at the expense of others. This is called a “cooperation agreement,” and we have talked about it a few times because it arguably raises antitrust problems (but probably not). If all of your lenders agree not to cut side deals, that limits your ability to do LMEs with them. Of course, you could try to do LMEs with new lenders who aren’t part of the cooperation agreement, but:

1. It’s often easier to do LMEs with existing lenders (who can vote to amend your existing loans) than new ones; and
2. If you are a big company, you might have borrowed from most of the potential lenders anyway, so there might be no one left outside the cooperation agreement to give you a new loan.

The first problem is sometimes avoidable; sometimes you can take value from existing lenders and give it to new ones without any vote of existing lenders. As for the second problem … look, credit investing firms are tough places. If you have borrowed from one portfolio manager at a firm, and if that portfolio manager has signed a cooperation agreement and promised not to lend you any more money, what if you called a different portfolio manager at the same firm? “Hey, do you want to make some good money at the expense of your colleague down the hall? What if we took some of her collateral and gave it to you?” That’s a good pitch! The competition with the person down the hall is fiercer and more ever-present than competition with other firms.

I’m kidding, mostly, but not entirely. Here’s a fun story from Bloomberg’s Irene Garcia Perez, Giulia Morpurgo and Kat Hidalgo: 

A potential debt revamp at Aston Martin Lagonda Global Holdings Plc is setting the stage for an unusual battle between different divisions of asset management giant BlackRock Inc.

On one side are the firm’s bond funds, some of which fall under the purview of global fixed income chief investment officer Rick Rieder. They’re part of the creditor steering committee that organized to present a united front to the company if it needed to discuss a refinancing of its debt or raise additional liquidity.

Meanwhile, Aston Martin has been in talks with money managers including HPS Investment Partners — the private credit specialist founded by Scott Kapnick, Scot French and Michael Patterson that BlackRock acquired a year ago — to raise fresh cash by moving assets out of the reach of existing lenders. …

BlackRock’s exposure to Aston Martin’s bonds sits in both actively managed and index-tracking funds, Bloomberg data show. The firm joined other creditors, including more opportunistic buyers, in signing a cooperation pact binding them to act in concert in debt talks with the company, out of fears Aston Martin was looking to raise financing elsewhere. ...

The maneuver being discussed, known as a drop-down, could be costly for existing creditors. In a sign of the impact, Aston Martin bonds plunged by as much as 10 cents on the dollar last week, to their lowest level on record, after Bloomberg reported on the debt talks.

HPS is part of BlackRock, but it’s not BlackRock BlackRock; it has some independent existence. And it can make its own investment decisions:

BlackRock, in its own SEC disclosure, said there might be potential conflicts of interest between its funds. It said it would mitigate those with “independent investment decisions,” with each account acting in its own best interest.

Seems fine! BlackRock runs different funds, and the managers of those funds have fiduciary duties to the investors in those funds. The managers of the funds that hold Aston Martin bonds have a duty to try to get paid back, but the managers of the HPS funds arguably have a duty to try to stiff the bondholders and collect more money for themselves. This all feels a bit second-best, but it is the world we live in.

In February, Paramount Skydance Corp. agreed to buy Warner Bros. Discovery Inc. for an equity value of about $81 billion and a total value of $110 billion including debt. When that deal closes, Paramount will have to pay something like $81 billion for Warner’s stock, plus $15 billion to repay some of Warner’s existing debt. It will finance those payments with a combination of (1) $47 billion of new stock and (2) $49 billion of new debt. [1]  The new debt will come in various tranches that will pay interest of, say, 6% to 8% per year. [2]  The holders of the new stock — largely Larry Ellison and RedBird Capital — will own the equity upside of Warner. (Also of Paramount, but Paramount is smaller than Warner, so the combined company will be mostly Warner.)

That’s when the deal closes. Paramount has not yet issued that debt or stock, because it doesn’t need the money yet, because it doesn’t have to pay for Warner yet. Companies do not regularly go around pre-funding $100 billion acquisitions. “Banks have lined up enough investor demand to cover most of the roughly $49 billion debt package backing Paramount Skydance Corp.’s takeover of Warner Bros. Discovery Inc. — long before launching the deal,” Bloomberg’s Claire Ruckin reported a few weeks ago, and the money will be there, but it’s not there yet.

Until closing, Warner will be financed by (1) its existing debt, which pays interest of between 3.9% and 7.7% and (2) $81 billion of stock, held by its existing stockholders. Warner’s stockholders do not expect any equity upside. They’ve already agreed to be cashed out for $81 billion ($31 per share). They do, however, get some interest, eventually: “In the event the transaction has not closed by September 30, 2026, WBD shareholders will receive a $0.25 per share ‘ticking fee’ for each quarter (measured daily) until closing.” That’s $1 per share per year, or about 3.2%.

In some sense that is … cheap financing? Like, at this point, Paramount’s shareholders probably own the equity upside of Warner: When the deal eventually closes, Warner will belong to Paramount. But until then, they are mostly financing Warner with an $81 billion IOU that pays zero interest now, and will start paying 3.2% interest in September. I suppose you could look at it differently. Bloomberg’s Josh Sisco and Hannah Miller report:

Paramount Skydance Corp. was on the brink of closing its blockbuster $110 billion takeover of Warner Bros. Discovery Inc. Now the companies are facing a legal hurdle that risks putting the deal on hold for months at a cost that could quickly climb to billions of dollars.

On Monday, a federal judge granted a request from states challenging the deal to pause the tie-up for two weeks, saying it “likely” violates antitrust law. But that could be just the start of a much longer delay. In early August, US District Judge Araceli Martínez-Olguín will hold a hearing in Oakland, California, to determine whether the acquisition should be put on ice pending the outcome of a full trial. …

Now, Paramount is facing a race against the clock. If it doesn’t close the deal by the end of September, Paramount must pay late fees to Warner Bros.’ shareholders of about $7 million per day. That makes an April trial date an eternity for the company that was so close to tying the knot. With the daily fee, an April trial could total well over $1 billion in extra costs to Paramount.

Sure but if they close the interest rate goes up? Obviously the downside for Paramount is mostly that it can’t start running Warner yet; it doesn’t really own Warner until the deal closes. And the deal might never close; then it is paying 3.2% interest to finance an asset it will never own. 

Bloomberg’s Denitsa Tsekova and Leonardo Nicoletti have an article today about possible insider trading on Polymarket. I write a lot about insider trading on mergers, and the tells are pretty well-known at this point. If you have never traded stock options before in your life, but one day you buy a lot of cheap short-dated out-of-the-money call options on some company, and the next day it announces that it’s being acquired and the stock shoots up, that’s probably insider trading. You might look for the same basic tells — never doing it before, doing one cheap low-probability trade, having it pay off quickly — in prediction markets, and Polymarket trades are public. So:

A Bloomberg Businessweek analysis found that trades with characteristics often associated with insider activity became more prevalent on Polymarket starting this January. The review focused on 34,000 transactions flagged as potential insider trades by analytics platform Polysights from August 2025 to June 2026. They were made on Polymarket’s global exchange, where, unlike on Kalshi, they’re publicly visible on a blockchain network. (Polymarket also operates a US-based exchange that’s limited mainly to sports.)

Polysights flags a trade after scoring it across eight different metrics, including how much money the trader is wagering, how recently their account was created, how low the odds were when the trader entered the market and how much of the trader’s volume is concentrated across one or a few markets. This approach can identify transactions that differ markedly from typical market behavior, but it can’t answer definitively whether a trader skirted rules governing the use of nonpublic information. Some bettors could simply have had better research, insight or luck.

Fine, sure, maybe some insider trading. Here’s the thing about Polymarket that drives me nuts, though. As I keep saying, it is very weird that:

• Polymarket is not allowed to take any bets from US traders on its main exchange, insider trading or not; but
• It does, all of the time; that appears to be much of its business, it advertises constantly in the US, and nobody seems to care. The US Commodity Futures Trading Commission last year “killed [an] investigation into whether Polymarket was illegally serving U.S. customers,” even though absolutely everyone knows that it is.

Tsekova and Nicoletti write:

For American regulators, the question of whether trades originate in the US is crucial. It can also be difficult to answer. In Polymarket’s case, the cryptocurrency transfers customers use to fund trades and cash out rely on digital wallets whose addresses are visible but aren’t attached to a physical location. And while exchanges created and regulated in the US, like Coinbase, are mostly used by traders situated there, foreign users can access them too. (Coinbase says that it takes steps to ensure all activity on its exchange is lawful and that it works routinely with law enforcement.)

What is clear is that a large volume of trading on Polymarket’s global platform is going through US-regulated exchanges. Roughly half of all traceable trading volume since January 2021 — about $21 billion — came from wallets funded by such exchanges, according to exclusive data from blockchain intelligence firm Dune. For US geopolitical and political markets tied to Iran, the share was far higher, reaching 70%. And flagged trades related to these markets since last July were almost three times more likely to have been funded through US-regulated crypto exchanges than through other sources.

It is not certain that every trade on US politics funded from a US-based crypto exchange is done by a US-based trader, but it is certain that some of them are (because those people keep getting arrested for insider trading!). As a legal matter, Polymarket is not allowed to take bets from US customers on its main exchange; as a practical matter, it is. 

Are these facts related? I mean:

• If your Polymarket trading is illegal anyway, might you also be tempted to illegally insider trade on Polymarket?
• If there’s never any enforcement against Polymarket for letting US customers trade illegally, might you assume that there won’t be much enforcement against customers who insider trade?
• Might you assume that, if Polymarket is letting you trade illegally, it will be hesitant to report any insider trading, since it’s technically not allowed to take your bets anyway?

That’s not any sort of advice, don’t insider trade, but the general regulatory stance of giggling at illegal Polymarket trading probably does encourage some illegal Polymarket insider trading.

Elsewhere: wedding prop bets.

Here is a very fun article in the Daily Progress noting that Dominion Energy’s proposed Valley Link transmission line project in Virginia — 
“sold to the state as a necessary undertaking to feed Virginia’s power-hungry data centers” — happens to run through a historical gold mining belt, and just hinting that that might have been intentional:

“Unfortunately the information on mines is not available at this time,” Dominion spokesman Craig Carper said in an email. “We’re still in the conceptual phase of the project. We'll know more as the project develops.” …

While many are questioning why the project can’t be built elsewhere, fewer have inquired why Dominion chose this particular route in the first place.

During an interview back in March, Dominion representatives said The Daily Progress was the first news outlet to inquire about the land underneath the project as opposed to the path laid before it.

None of the three representatives present could go into much detail, but Carper, who was there, confirmed, “We will disrupt a portion of properties during construction.”

While not guaranteed, that disruption could easily turn up gold, industry experts say. And because Dominion will own the land, it will own the gold underneath it. In fact, before Dominion will be able to erect its transmission towers, it will have to take soil samples and excavate earth — not unlike the early stages of gold prospecting and mining.

I have to say, if I was writing a conspiratorial financial thriller, I would write about a gold mine — an old-fashioned commodity business — that was used as cover for secretly building data centers. Data centers are the new gold, etc. But I concede that this thriller — data centers as a cover for secret gold mining — might be easier to pitch to Hollywood.

Wall Street Talks Up Carry Trade as Returns Soar Most in Decades. BlackRock Leads $12 Billion Financing for New Meta Data Centers in Texas. Bessent Says US to Scrutinize Chinese AI Models for IP Theft. China weighs tighter export controls on AI models and chips. Quant Hedge Fund ‘Free Fall’ Spooks Wealthy Investors in China. DeepSeek Founder’s Fund Slumps 16% as AI Rout Hits China Quants. Carlyle in Talks to Hand ESG Consulting Firm Over to Bridgepoint. Kalshi Seeks Approval for Perpetual Futures Tied to Gold, Silver. The Man Who Runs the IRS Spied on Colleagues When He Worked at JPMorgan. Tom Hayes says UBS’s ‘Project Chocolate’ probe shows he was targeted from outset. The New Jersey Financier Behind Trump Media’s Pivot Into Nuclear Energy.

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