Unveiling the Insights of Continuous Trading: Delving into Market Architecture and Execution Methods
The world of finance is gearing up for a significant shift, as U.S. stock exchanges are moving towards 24-hour trading. A recent report by Nasdaq reveals that half of its listed companies have reservations about expanding trading times, particularly in areas such as liquidity and corporate actions.
This ambitious endeavour is not without its challenges. Overnight trading, from 8 p.m. to 4 a.m., currently accounts for just 0.2% of total equity market volume, indicating limited liquidity during extended hours and risks of price volatility and wider bid-ask spreads.
To address these issues, the upcoming launch of the 24X National Exchange is a major step forward. Approved by the SEC, this exchange will offer regulated trading of U.S. equities from 4 a.m. to 8 p.m. ET on weekdays, starting September 29, 2025. By extending trading hours to 16 hours per day, the 24X National Exchange aims to capture demand from investors in Asia-Pacific and provide a competitive alternative to existing overnight trading by alternative trading systems (ATSs) such as Blue Ocean.
Major U.S. exchanges like Nasdaq, NYSE, and Cboe, along with the Depository Trust & Clearing Corporation (DTCC) and consolidated tape providers, are also working on extending trading and upgrading infrastructure to support longer hours and potentially move towards full 24-hour trading.
The push for 24/5 trading is driven by several factors. With 24/5 trading, exchanges will need to move promptly to clear trades, test security features, and undertake trading system maintenance. Geopolitical events occurring during U.S. overnight hours now trigger immediate and significant market trading responses, highlighting the interconnected nature of today's 24-hour trading landscape.
Moreover, the exponential growth of social media and news dissemination, coupled with the ease of mobile trading technology, has created more knowledgeable investors who want more access to 24-hour trading. This year, tariff wars, high inflation, and technology realignment are defining market trends and trading experiences, making instant reaction to the ever-changing economic, political, and corporate landscape essential for investors.
As more regulated exchanges enter the market, market stability and confidence should improve, paving the way for more efficient and accessible 24-hour trading. However, ensuring fair and transparent price discovery in less liquid periods and managing the risks associated with trading outside regular market hours remain key hurdles.
Government regulators, including the U.S. Securities and Exchange Commission, will need to continue to monitor the landscape and determine whether similar rules, such as Regulation NMS (Rule 611), should apply to overnight trading.
In conclusion, while there is significant momentum towards expanding U.S. stock exchange trading hours, the full realization of 24-hour regulated trading faces liquidity, infrastructure, and regulatory adaptation challenges that are actively being addressed by exchanges, regulators, and market participants. The concept of 24-hour trading is gaining traction due to global connectivity and technological advancements driving demand for continuous access to financial markets.
Harry Temkin, a seasoned investor, is closely following the ongoing transformation of the finance sector, particularly the push for 24-hour trading. Recognizing the potential of technology-driven exchanges like the 24X National Exchange, he sees opportunity for innovative investing strategies in the evolving landscape of global finance.
