"23 hours x 5 days" trading is not just about extending hours; data, clearing, and pricing systems must operate 24/7.

Written by: Mike Cahill, Forbes

Translated by: AididiaoJP, Foresight News

The U.S. stock market is set to open "23 hours x 5 days" for trading, but the real question is not whether the trading hours are long enough

The next phase of the U.S. stock market will be defined by longer trading hours. However, what we should really be asking is not "how many more hours," but whether the market can still maintain institutional-level liquidity when most people are asleep.

On December 6th, the U.S. stock market is expected to take its biggest step yet towards continuous trading. Nasdaq, NYSE Arca, 24X National Exchange, and Cboe EDGX are preparing to add an overnight trading window from 9 PM to 4 AM Eastern Time, in addition to the existing pre-market, regular, and after-hours sessions.

This move responds to global demand and is also driven by competition. Investors have already been buying and selling U.S. stocks in alternative trading systems, and the crypto and prediction markets have led more people to feel that "around-the-clock trading" should be the norm.

So the question arises: does "23 hours x 5 days" trading simply meet an existing demand or will it create a new market out of nothing? The answer is likely both. However, in the first phase, the focus is not necessarily on creating new trades but rather integrating existing trades into a more consolidated, regulated market structure.

Overnight demand has existed for a long time, but is highly concentrated

Overnight trading has been operating through ATS and other venues for many years. Blue Ocean's overnight period runs from Sunday to Thursday, from 8 PM to 4 AM Eastern Time; OTC Markets operates from 8 PM to 7:45 AM the next day, offering trading for certain securities.

These venues indicate that investors indeed want to buy and sell U.S. stocks during Asian and European trading hours. The demand comes from several types of people: foreign investors wanting to enter during their local trading hours, U.S. retail investors wanting to react to news outside of regular hours, and those who are already accustomed to all-day digital markets.

Growth is real, but the scale is still small. In the second quarter, overnight trading accounted for about 1% of U.S. stock trading volume, but activity surged by 358% year-over-year. Foreign investors made up 37% of overnight trading volume, while institutional accounts only accounted for 7%. Trading is also highly concentrated: in August, only 15 stocks made up half of the overnight trading volume.

This set of figures highlights a key distinction: there is demand for overnight trading, but evidence of broad institutional demand for overnight stock trading across the entire market is lacking.

This gap is where exchanges are placing their bets. If the market can provide reliable data, competitive execution, and sufficient liquidity, more institutional funds may follow. If extending the trading clock merely results in a thin order book, then this new window might only formalize the participation of retail and overseas demand.

Trading hours are not the answer; market quality is

The rationale has always been simple: quality is more important than quantity. The market intends to increase the amount of available data, but who has the capability to continuously provide top-notch and accurate data remains unclear.

The strongest argument for extending trading hours is certainly convenience. Investors can react to earnings reports, geopolitical events, and fluctuations in overseas markets without waiting for the next U.S. market opening. This is useful, but not enough.

The quality of a market ultimately depends on execution quality, not just on how many hours it is open.

Participants in the overnight session are fewer; liquidity providers are fewer; the order book is thinner. An analysis by BlackRock on actively traded iShares ETFs found that overnight bid-ask spreads are, on average, nearly 10 times wider than during regular hours.

So it is correct for institutional investors to focus on market quality. Wider spreads mean higher trading costs; thin liquidity amplifies price volatility. Quotes may exist, but that doesn't mean a portfolio can execute a meaningful scale near those prices.

The overnight market can still contribute to price discovery. It can absorb new information before the regular trading hours and allow investors to hedge risks when the U.S. markets officially close. However, whether these benefits can be realized depends on whether participation can expand from the current concentrated retail and overseas investors to a broader range.

Before "23 hours x 5 days" trading becomes a truly meaningful institutional trading venue, rather than just an extended access window, the market needs deeper liquidity, transparent pricing, and consistent protections.

Longer trading hours require testing the infrastructure first

Extending trading hours essentially turns the "market session changes" into a major test of infrastructure.

Nasdaq's model includes a pause from 8 PM to 9 PM to process and roll over the trading day; overnight trading will be divided into two trading days. This arrangement will affect settlement, financing, reporting, corporate actions, tax treatment, client account statements, and market interpretations.

Cboe's plan clearly sets out dependencies: the launch depends on SEC approval, whether DTCC and SIP can provide real-time support, and the timeliness of corporate action data. NSCC’s shift to 24x5 clearing is a necessary step, but it is just the first step needed by the industry.

Continuous markets also need continuous information systems. When venues open, quotes and trades must be consolidated; corporate actions must be distributed before impacting trades; regulatory halts must be communicated across venues; and when the last regular session ended several hours ago, reference prices must be clear.

Order protection is also the same issue. The SEC proposed in June to withdraw Rule 611 of Reg NMS, which prohibits trade-throughs for national market system stocks, while also eliminating Rule 610(e), which involves locked and crossed quotes.

Timing is critical. During regular sessions, companies operate within established frameworks of display quoting, routing obligations, and expectations of the national best bid and offer. The overnight market is thinner, more fragmented, and relies more on the individual data of each venue.

If existing trade-through frameworks change, the industry needs to clarify best execution, quote protection, and venue competition rules. It does not necessarily have to retain every rule unchanged, but when liquidity is scarce and investors are more easily exposed to fragmented pricing, the rules must be clear and discernible.

The market can tolerate a period of low activity. What it cannot tolerate is uncertainty over which price, trading day, corporate action instruction, or displayed quote should govern an active order.

The "23 hours x 5 days" trading market must be supported by a 24/7 data system

Ultimately, as we move towards a "23 hours x 5 days" trading market, the criterion is not how novel "longer trading hours" are, but whether after dark, the market can remain equally clear, resilient, and accountable. Bloomberg's reporting on the upcoming overnight trading captures visible changes; the less visible change is that market data must evolve alongside.

For data providers, brokers, exchanges, and infrastructure companies, this means there can no longer be a clean "today/tomorrow" boundary. Systems must handle trading days, corporate actions, reference pricing, and real-time executable quotes across overlapping periods while maintaining support, monitoring, and maintenance coverage around the clock.

Nasdaq states this is a multi-year industry effort involving exchanges, regulatory agencies, and infrastructure providers. This coordination requires stronger automation, regional support coverage, reliable failovers, and clearer processes for deployment changes during market opening.

Two years from now, success cannot solely be measured by the share of trading volume in off-hours. The more important signal will be: broader participation, narrower spreads, deeper order books, reduced concentration in a few securities, and uniform, understandable market data across all periods.

If these conditions mature, "23 hours x 5 days" trading may become a new layer of structure in the U.S. market. If not, the industry will have just created a longer trading day but failed to create a better market.