Nasdaq joins exchanges seeking to offer round-the-clock trading

Nasdaq plans to offer 24-hour trading on its equities exchange, the latest venue seeking to capitalise on growing global demand for US stocks.

The second-largest US exchange operator plans to enable the extended trading five days a week, according to Nasdaq president Tal Cohen. It expects to start round-the-clock trading in the second half of 2026, pending regulatory approval and alignment with the rest of the industry, he said in a post on LinkedIn. 

The move follows plans by other exchanges: Cboe Global Markets said in February it would extend trading on its equities exchange to 24 hours, five days a week, pending regulatory approval. The New York Stock Exchange filed its own application in October 2024 with plans to offer trading 22 hours on weekdays. 

Mr Cohen pointed to heightened interest in US markets from retail investors in different time zones. Still, he said markets and investors need to consider the risks associated with increased volatility and higher transaction costs that can come as a result of the expanded trading hours. Despite the increase in overnight trading, liquidity is still “significantly lower” during those hours, according to him. 

The plans also hinge on an update to the securities information processor, or SIP, which displays the best bid and offer price of a stock on an exchange at the time of transaction. For overnight trading to take effect on public stock venues, this data needs to be updated to accommodate the extra hours. 

Nasdaq will work with other industry participants to mitigate these concerns and risks, Mr Cohen said. It is forming a group to do so, according to a spokesperson. 

“The question is not whether we can build a market that operates (24 hours a day, five days a week), but how we do so in a way that strengthens investor confidence in US capital markets,” said Mr Cohen.

Extended trading hours became more common during the pandemic, allowing investors to react to market-moving events immediately. Firms such as Robinhood Markets and Interactive Brokers Group started enabling customers to buy and sell US stocks 24 hours a day, five days a week on off-exchange venues like Blue Ocean’s alternative trading system.

Venues that allow non-stop stock trading have split Wall Street. Proponents say investors both in the US and overseas want the ability to react and access stocks outside of US market hours. Opponents have warned that the quality of trading may suffer from lower volume, which can make pricing less precise.

The majority of trading activity still occurs around the infamous opening and closing bell across the largest stock exchanges in US markets. With the additional hours, a lingering question becomes whether institutional traders will start to trade outside of those moments when volumes are higher. BLOOMBERG