NYSE’s owner is backing 24/7 stock tokens without Wall Street’s usual price rules

The owner of the New York Stock Exchange, Intercontinental Exchange, is launching a new exchange called OKXICE that will allow 24/7 trading of stock tokens without using the usual Wall Street price rules.

The platform, a joint venture between ICE and OKX, will let users trade tokens representing traditional shares around the clock using technology similar to Uniswap, rather than the order books that power conventional markets.

This move comes as crypto and tokenized assets have seen increased volume, and it aims to solve the problem of trading when the main equity markets are closed.

DeFi-style trading pools

OKXICE will not use a traditional order book to match buyers and sellers. Instead, it will use automated pools of assets where traders deposit stock tokens and stablecoins like USDC.

A buyer trades against the pool's inventory, and the software adjusts the price as the balance shifts, making each additional fraction of a share more expensive than the last.

This model is familiar to users of decentralized finance protocols, but OKXICE says it will still require identity checks and permission to trade, distinguishing it from a completely open market.

Price differences and slippage

The new pricing model can result in a different cost than a standard purchase. For example, a $1,000 buy order in a pool with 100 tokens and $10,000 in stablecoins would yield only about 9.09 tokens, averaging $110 each.

This phenomenon, known as slippage, occurs because the software drains inventory, making the last tokens more expensive. A larger pool would absorb the order with less price movement.

Users will be able to set a slippage tolerance to control how much worse the quoted deal can get, but the exchange warns that a rejected blockchain transaction can still incur network fees.

Issuer objections and SEC relief

The SEC has granted the platform temporary, conditional relief from registering as a conventional exchange for five years, provided it meets requirements covering shareholder rights, trading halts, and issuer objections.

OKXICE will not be subject to Regulation NMS, the framework that includes some of the ordinary price protections connecting US equity markets, though antifraud rules and best-execution obligations for brokers will still apply.

Trading outside hours

The ability to trade outside of traditional hours is a key feature, as company news, court rulings, and geopolitical crises can occur when the stock market is closed.

However, the new tokens will not use a stock-price feed from the NYSE or elsewhere to determine their execution price. The price will be based solely on the assets in the pool.

This could lead to price discrepancies between the token and the underlying stock, and professional traders may struggle to exploit these differences due to hurdles like the time needed to hedge exposure.