Nasdaq seeks SEC approval for 23-hour trading during weekdays
Summarize this article with:
Joins peers in touting growing interest in trading U.S. stocks outside of traditional market hoursAuthor of the article:You can save this article by registering for free here. Or sign-in if you have an account.Nasdaq Inc., the second-largest exchange in the United States, is looking for regulatory approval to extend trading hours on its stock venues to 23 hours during the work week.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.The firm asked the Securities and Exchange Commission (SEC) for permission to add an additional trading session, from 9 p.m. to 4 a.m. ET, according to a filing Monday. That would be on top of the pre-market, regular and post-market hours the firm already operates, the firm said.“This evolution reflects a simple reality: global investors expect access on their terms, in their time zones, without compromising trust or market integrity,” Chuck Mack, senior vice president of North American markets at Nasdaq, said in an emailed statement.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.The exchange joins peers in touting growing interest in trading U.S. stocks outside of traditional market hours, which run from 9:30 a.m. ET to 4 p.m. For investors outside U.S. trading hours, faster pricing on earnings and macro headlines may reduce overnight gap risk, though limited digestion time could also amplify volatility and short-term noise, analysts said.Earlier this year, Nasdaq announced its intention to offer additional trading hours on its equities exchange, seeking to capitalize on growing global demand for U.S. stocks. It expects to be ready for extended trading early in the third quarter of 2026, pending regulatory approval and alignment with the rest of the industry.Nasdaq’s move “is absolutely a game-changer,” said Dilin Wu, research strategist at Pepperstone Group in Australia. “It effectively brings U.S. stocks into our local trading hours, increasing liquidity and allowing investors here to react in real time instead of waiting for overnight sessions. For anyone active in tech or high-beta U.S. equities, it’s a significant step toward a truly global market.”Other exchanges have also outlined their own path to extending trading hours on their venues, including the New York Stock Exchange, which plans to offer trading 22 hours on weekdays. That proposal got initial approval from the SEC in February, pending updates to the market’s data feed.To make this a reality, key players including the Depository Trust & Clearing Corp. (DTCC), which handles clearing, and the Operating Committees of the Securities Information Processors, which display real-time pricing, need to extend their hours too. Both organizations have submitted their plans, with the DTCC saying it plans to begin clearing equity trades 24 hours a day, five days a week by the second quarter of 2026.The development may appeal “to more retail investors in different markets around the world,” said Kerry Craig, global market strategist at JPMorgan Asset Management in Melbourne.Extended trading hours became more common during the pandemic, allowing investors to react to market-moving events immediately. Firms such as Robinhood Markets Inc. and Interactive Brokers Group Inc. started enabling customers to buy and sell U.S. stocks 24 hours a day, five days a week on off-exchange venues like Blue Ocean’s alternative-trading system.Venues that allow extended stock trading have split Wall Street. Proponents say investors both in the U.S. and overseas want the ability to access and react to stocks outside of U.S. 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 famed opening and closing bells across the largest stock exchanges in U.S. markets. With the additional hours, a lingering question becomes whether institutional traders will start to trade outside of those moments when volumes are higher.“The real test is liquidity depth,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “If institutional participation follows, it’s a clear win for Asia-based investors; if not, extended hours may prove noisier rather than more efficient.”—With assistance from Winnie Hsu and Ruth Carson.Bloomberg.comPostmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.