- Nasdaq has asked the SEC to allow nearly 23-hour weekday trading by adding a 9 p.m.–4 a.m. ET night session with a brief daily maintenance pause.
- The target launch is the second half of 2026, driven by rising overseas demand and competitive pressure from rivals pursuing longer hours.
- Approval depends on extending core market plumbing—SIPs, clearing and settlement, and protections like circuit breakers and limit up/limit down—into overnight hours.
- Key concerns are thin liquidity and weaker price discovery overnight, which could widen spreads, raise volatility, and increase operational burdens for market participants.
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In a strategic effort to align U.S. equity markets with global trading realities, Nasdaq has proposed to extend its trading window to 23 hours per weekday by adding a Night Session running from 9 p.m. to 4 a.m. ET and pausing one hour each night for system maintenance., This step is part of an industry-wide shift, with NYSE planning to move to 22-hour daily trading and Cboe also exploring 24/5 models.,
The move reflects growing international demand: U.S. equities holdings by foreign investors totaled approximately $17 trillion as of mid-2024, nearly doubling since 2019., [0news12] Such demand has been constrained by current market hours, creating opportunity for Nasdaq to capture additional volume from global participants operating outside U.S. daytime hours.,
However, the proposal hinges on significant infrastructure readiness. The Securities Information Processors must extend real-time trade and quote dissemination through nights and weekends (excluding holidays), which requires regulatory approval. At the same time, clearing and settlement needs full 24-hour capability; the DTCC has signaled Q2 2026 as a goal for round-the-clock clearing.,
Operational and market-quality risks are central. Overnight sessions typically feature lower liquidity, which can result in wider bid-ask spreads and more volatile pricing. Existing investor protections, such as trade halts, limit up/down rules, and market-wide circuit breakers, are designed for core trading hours and will need extension or adaptation., Furthermore, regulatory and compliance overhead increases when trading volumes are lower and participation from institutional players is uncertain outside peak hours.
From a competitive standpoint, Nasdaq’s move is intended to maintain relevance versus alternative trading systems offering extended hours, and to challenge newer exchanges such as 24X which already have SEC approval to trade U.S. equities nearly 23 hours a day., Institutional revenue implications may include higher fees for extended hours, greater costs for staffing, monitoring, and risk management. Retail brokers supporting after-hours trading may benefit, but their margin and pricing models could come under pressure related to volatility and execution quality.
Strategic implications and open questions:
- How will liquidity providers, market makers, and institutional investors adjust behavior during night sessions, and will volume be sufficient to support fair pricing?
- Will Nasdaq (and competitors) charge incremental fees for overnight activity, and how will that affect participation?
- Can robust market surveillance, trade halts, and guardrails be extended effectively to non-core hours to prevent manipulative behavior or systemic risk?
- What is the competitive response from NYSE, Cboe, and newer entrants like 24X, and how might this reshape inter-venue competition and market structure?
- What are the cost implications for brokers, clearinghouses, and data vendors, and will those be passed on to end investors?
Supporting Notes
- Nasdaq formally submitted a proposal to the SEC to extend weekday trading to 23 hours a day, adding a Night Session from 9 p.m. to 4 a.m. ET with a one-hour nightly pause.,
- The timing for implementation is targeted for the second half of 2026, contingent upon regulatory approval and infrastructure readiness.,
- Foreign holdings of U.S. equities as of mid-2024 were approximately $17 trillion—up around 97% since 2019—underscoring the international demand factor.
- Securities Information Processors (SIPs) plan to extend operating hours from 8:00 p.m. Sundays through 8:00 p.m. Fridays, excluding holidays, with a technical pause daily. Approval is pending.
- DTCC/NSCC are planning heightened readiness; DTCC aims to support 24/5 clearing activity by Q2 2026.
- Investor protection mechanisms like Market-Wide Circuit Breakers, Limit Up/Limit Down, and Clearly Erroneous rules are currently confined to regular market hours (9:30a.m.–4:00p.m.) and will need extension to cover new hours.
- Critics—such as Wells Fargo—have expressed concerns that extended hours may lead to reduced liquidity and increased volatility during overnight sessions.
- Competing exchanges: NYSE has filed for 22-hour weekday trading, Cboe also plans to adopt 24/5 trading, and the new exchange 24X has SEC approval for 23-hour trading already.,