Inside the Future of Investing: Fractional Trading, AI & 24-Hour Markets

I'm Vince Molinari and welcome to FinTech TV.

We're broadcasting from the iconic New York Stock Exchange, and we're bringing you special coverage today from the New York Stock Exchange International Retail Forum.

And with that, I'd like to welcome Steven Nash, who is the chief commercial officer over at Drivewell.

Steven, welcome to the show.

Thank you.

Thank you for having me.

Well, delighted.

Well, So many of our, uh, audience members know Drive Wealth, uh, and their participation here at the New York Stock Exchange.

Maybe just give us a brief background on Drive Wealth as we kick off.

Sure.

So, so Drive Wealth is a broker dealer that, uh, I, I would say re-envisioned the, the, the ability to use technology behind brokerage infrastructure worldwide, and we Uh, you know, now power over 100, um, retail brokers around the world with, uh, APIs and technology that is the infrastructure behind their front ends, um, which ultimately means that we're, we're powering, you know, as Much as 50% of the trading every day that happens notionally or fractionally in the US stock market.

Uh, that's incredible.

Yes, and, uh, the business has grown and flourished, um, you know, uh, you know, behind the mission of democratizing investing, um, well, going back to the foundation and the starting of Drive Wealth, right?

Exactly, exactly, to make it so that anyone anywhere can have the same opportunity to buy, you know.

Uh, $1000 or $1 of their favorite stock, um, and, and, you know, pioneering the decimalization or in fractionalization of, uh, US equity trading to eight decimal places, which is really created an unlock and a paradigm shift for retail trading worldwide.

Absolutely.

Well, look, the, the power of the New York Stock Exchange, we know it well.

The convening power, here we are at the first, uh, international retail forum.

Major, uh, focus on Asia.

You know, why are you here and why is that so important?

Asia is a huge focus for us and we have a number of partners in, in across Asia that we, we execute for and many of those trades end up executing on the, on the New York Stock Exchange.

Um, it is uh a market that is incredibly important to us.

And, and, and where we've been, you know, working with, um, companies locally in those markets, brokers in those markets to have better experience for retail customers that want to trade US equity securities.

Well, it's, it's a great segue.

Maybe loop that, uh, further for me.

So one of the big topics, uh, today at the forum is 24/7 trading.

Your view of that, how fast is it coming and, and really how important at the end of the day?

It's becoming increasingly important, and we've been at the forefront of bringing 24 hour trading to the market.

You know, initially it was Blue Ocean and now Bruce, and you have 24 hour exchange, so competing ATSs.

But the spreads have been quite wide, right?

And but we're seeing incredibly strong interest from what is trading in Asia, which is their daytime on US stocks that are trading overnight.

What we're incredibly excited about is New York Stock Exchange launching 23 hour trading later this year.

NASDAQ's coming on as well, and, and that, that, that also then brings a 23 hour sip, which ultimately should lead to.

Tighter spreads, tighter spreads, ideally, we have greater liquidity.

So, uh, this world is becoming 24 hour instant everything, and, uh, and, and that bodes well, I, I think for, for the future of, of New York Stock Exchange and US equities, um, being, you know, the, the dominant, uh, factor in the global wealth, uh, makeup around the world.

I want to pull on that thread a little bit more, Steven, because you bring.

Probably 234 different things in there at once.

So, you know, technological advancements we've seen consistently over the history of markets, more technology, better efficiency, compression or spreads, increased volumes, and you kind of alluded to it there a minute ago, uh, with greater interest, right, that it sounds like those spreads might be decreasing or compressing, which is great for the retail buyer on their execution.

Absolutely.

And, and you see that the, the retail buyer is not as price sensitive, right?

To, to, um, to, to, to trading overnight.

Ultimately, that means that they pay more, and so with the spreads coming in and tightening, ultimately they're going to get a better experience and be able to have greater liquidity in the overnight.

Uh, one of the things that, that we're working on to, you know, to, to improve, um, that is, is the launch of 24 hour or notional trading 24 hours a day.

So you can buy, you know, $1 of Google stock, um, you know, in the middle of the night for us and in the broad day for them, uh, for, for the Asian market, and in that.

I, uh, I, I think, you know, a real testament to the, the power of, of what technology can open up, um, because what we've seen certainly in, in Asia and in the US and other markets is that once a retail investor trades notionally, the chance that they'll trade notionally again.

On their next trade is almost 99%.

So it's a huge paradigm shift.

That absolutely is.

And you, as we close out, you hit me with a couple of, uh, stats early that were so impressive about Drive wealth, and maybe you can share that, you know, talking about the, the number of, uh, I'd say firms that you're powering on the back end, uh, kind of the percentage of market share, particularly when we look at Asia.

So, we are powering, you know, certainly in the, in the market of Korea, you know, the top 15 brokers in that market.

And then increasingly increasing our footprint all across Asia, um, to, to be a dominant player.

In terms of the number of transactions that we do every day, um, we stack up about in ranking the 3rd rank behind Citadel and Virtue, then the 3rd is Drive Wealth.

Um, the lion's share of those would be fractional trades, um, that we're executing.

And on a daily basis, we're executing about just under half of the total notional trades that occur in the United States every day.

So that the volumes have been increasing and skyrocketing.

A lot of that is coming from Asia, and we see just more of it and we're tremendously excited, uh, about the future.

Oh, wonderful.

Steven, thanks so much for joining us today and uh terrific to have a little bit of a conversation.

Come back soon and tell us some more.

Absolutely.