(Bloomberg) — For decades, U.S. equity exchanges have hit the pause button every night, leaving markets shut for several hours. Come December, the lights will stay on much longer as the stock market shifts toward around-the-clock trading.
Nasdaq, NYSE Arca, 24X National Exchange and Cboe EDGX have crafted plans to add an overnight session from 9 p.m. to 4 a.m. in New York, on top of the regular hours and existing pre- and post-market periods they already operate. The expansion, set to take place on Dec. 6, seeks to capture growing demand from foreign investors while competing with crypto and prediction markets, which have upended traditional expectations of Wall Street’s operating hours.
Overnight trading has existed for years, primarily through alternative trading systems, but it’s made up a tiny slice of the total activity — around 1% of equity trading volume in the second quarter, data presented at a Securities and Exchange Commission roundtable last week show. But while tiny next to daytime trading by any account, overnight trading is growing quickly, surging 358% from a year ago.
The anticipated implementation of 23/5 trading has sparked a debate about what longer hours would mean for market participants worldwide. Proponents say the expansion will remove time-zone barriers and give foreign traders better access to U.S. markets. Skeptics see lower liquidity and wider bid-ask spreads as amplifying trading risks.
Institutional investors are mainly worried “about the market quality during the extended hours,” said David Easthope, a senior analyst at Crisil Coalition Greenwich, while concerns about operations and staffing are not necessarily at the top of their list.
A survey of buy-side equity traders the firm conducted last year showed market participants were not eager to trade stocks around the clock. With fewer players active outside regular hours, investors could face lower trading volumes, thinner liquidity and wider bid-ask spreads. That could bring additional operational risk and complexity, or even affect traders’ own physical and mental health, the survey showed.
The group’s sentiment has somewhat improved since the survey was conducted in the second part of 2025. There’s now “a greater sense of inevitability,” particularly as regulators move forward with the changes, Easthope said.
The concept of overnight trading has been popular with retail investors and trading venues for years. Once the December changes kick in, “the usual suspects will be there and be ready,” said Brian Hyndman, chief executive officer of Blue Ocean Technologies, one of the ATS providers that currently facilitate overnight trading.
“But I still think that we’re missing part of the industry, and that’s really the buy side and the investment banks,” he added. “They’ve been hesitant to get involved.”
Key market infrastructure providers are also preparing for the shift. Depository Trust & Clearing Corp., the main firm responsible for clearing U.S. stock trades, in June moved to a 24×5 model running from 8 p.m. New York time on Sunday to 8 p.m. New York time on Friday. Securities Information Processors, or SIPs, which collect and distribute quotes and trade data, also got a regulatory nod to extend their operating hours to support overnight trading.
Proponents of the shift are likely betting on the idea that once the infrastructure is there, institutional demand will follow suit, said Joseph Saluzzi, partner and co-head of equity trading at Themis Trading LLC.
Yet he’s skeptical about the transition.
“Institutional investors have no interest in trading in a low-liquidity, wide-spread market which is likely to be very volatile,” he said, adding that the combined volume of pre- and post-market trading on the exchanges accounts for just about 10% of the overall trading activity. “There’s actually a case, if you wanted to make it, that we have too many hours in the market, not too few.”
For now, institutional investors remain in wait and see mode. If the Dec. 6 shift improves price discovery during late hours, the cost of trading will eventually drop, helping institutional money managers capture alpha during the night, according to Jeff O’Connor, Liquidnet’s head of market structure.
Naturally, foreign investors are particularly active in late hours. They accounted for 37% of overnight trading volume in the second quarter, compared with just 7% for institutional accounts, according to the SEC data.
That trading activity is also highly concentrated. In August, just 15 stocks on average were responsible for half of the total overnight volume, often including sub-dollar shares of companies domiciled in China and Hong Kong. By contrast, 256 stocks accounting for half the volume during the regular session.
For now, Nasdaq and NYSE operate core sessions from 9:30 a.m. to 4 p.m. ET, five days a week. Those hours are supplemented by before- and after-hours sessions allowing limited types of trading starting as early as 4 a.m. and a post-market session from 4 p.m. to 8 p.m. After the December expansion, the exchanges will still have a one-hour break from 8 p.m. to 9 p.m. for maintenance and trade processing.
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