Nasdaq Inc., the second-largest stock exchange in the United States, has formally petitioned the U.S. Securities and Exchange Commission (SEC) to adopt Nasdaq extended trading hours, proposing a near-round-the-clock schedule that could redefine access to U.S. equity markets for global investors.
Under the rule change proposal, Nasdaq would extend its trading schedule from the current roughly 16-hour weekday operation to a 23-hour trading day, five days a week, beginning with the U.S. trading week on Sunday evening and closing on Friday evening.
This marks a dramatic departure from the traditional structure that has dominated U.S. markets for decades and reflects broader shifts in investor behaviour and market competition.
If approved, the exchange would split trading into two sessions with a daily technical pause:
Day Session: 4:00 a.m. to 8:00 p.m. Eastern Time, encompassing existing pre-market, regular market, and post-market trading.
Maintenance Break: 8:00 p.m. to 9:00 p.m. ET for system updates, clearing, and corporate action processing.
Night Session: 9:00 p.m. to 4:00 a.m. ET, introducing a new overnight trading window.
Nasdaq’s proposal would preserve traditional markers such as the 9:30 a.m. opening bell and the 4:00 p.m. close within the extended structure, while offering an entirely new period for trading activity outside standard U.S. hours.
Nasdaq officials argue that extended trading would better serve international investors, allowing access to the U.S. market in time zones more aligned with Asia, Europe, and the Middle East.
Chuck Mack, Senior Vice President of North American Markets at Nasdaq, emphasized that near-continuous access reflects globalization and heightened expectations among investors for flexibility and immediacy.
Proponents also highlight that other asset classes, particularly cryptocurrencies, already offer 24/7 trading, raising expectations among market participants accustomed to uninterrupted markets.
Nasdaq’s proposal is contingent on robust market infrastructure capable of supporting extended operations.
The U.S. Depository Trust & Clearing Corporation (DTCC), which handles clearing and settlement, has signaled plans for 24-hour clearing services by late 2026, a critical enabler for continuous trading.
Additionally, data dissemination mechanisms such as Securities Information Processors (SIPs) would require extended hours to ensure accurate and cohesive price feeds across venues.
The SEC now faces the complex task of evaluating how extended hours would impact market integrity, investor protection, and systemic risk before granting approval, a process that could take months and involve public comments and regulatory analysis.
Financial market participants have responded variably to Nasdaq’s extended hours proposal. Some industry voices welcome the change as a strategic evolution that could attract greater global capital and reduce latency in price reaction to overnight events.
However, there are notable concerns among institutional investors and major banks about potential downsides:
Liquidity Risks: Overnight trading could suffer from thin liquidity, leading to wider bid-ask spreads and less efficient price discovery.
Volatility: Lower participation during off-peak hours may result in larger price swings, complicating risk management.
Operational Costs: Continuous trading might require significant additional resources for brokers, clearing houses, and exchanges.
These shifts reflect the competitive pressures of global markets and the rise of alternative trading venues, including dark pools and electronic communication networks, which offer extended access outside traditional hours.
For retail investors, extended hours could present opportunities to react in real time to corporate earnings, macroeconomic events, or geopolitical developments occurring outside U.S. market hours.
Yet critics warn that risk management may become more challenging for individual traders during low-volume periods, potentially increasing exposure to market dislocations.
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