Nasdaq is paving the way for a significant transformation in its trading operations, proposing to extend trading hours to nearly 24 hours a day, five days a week for U.S.-listed equities and exchange-traded products. This ambitious move, which aims to facilitate trading almost around the clock, is expected to be submitted to the Securities and Exchange Commission (SEC) for approval, with plans to introduce the new schedule in the latter half of 2026.
The proposed trading schedule includes a “day session” running from 4 a.m. to 8 p.m. Eastern time, followed by a one-hour break for maintenance and testing, after which the “night session” would operate from 9 p.m. to 4 a.m. the next morning. Currently, Nasdaq’s trading hours encompass three weekday sessions: pre-market trading from 4 a.m. to 9:30 a.m., the regular session from 9:30 a.m. to 4 p.m., and after-hours trading from 4 p.m. to 8 p.m.
While the potential for near-continuous trading has garnered interest, it has also sparked significant criticism from various stakeholders in the financial industry. Detractors warn that this shift could exacerbate existing market issues such as thin liquidity and sharp price fluctuations, creating an environment that resembles gambling more than traditional investing. A commentary from Wells Fargo’s trading desk echoed this sentiment, stating that the move is “literally the worst thing in the world” in terms of further gamifying the stock market.
Jay Woods, chief market strategist at Freedom Capital Markets, echoed the concerns about the implications of extended trading hours on listed companies. Woods emphasized that companies require time to digest news and conduct meetings without the pressure of market fluctuations. He expressed concern that the proposed changes would strip companies of this vital period, opening up a “new can of worms” in terms of market management.
Retail brokers, including platforms like Robinhood, have already begun offering extended trading options for certain U.S. stocks and cryptocurrencies, responding to a demand from individual investors eager for the ability to react to global news at any hour. In parallel, the New York Stock Exchange is also exploring an extended-hours trading model, which has received initial SEC approval contingent on necessary data-feed upgrades.
Alongside the potential benefits of increasing market activity, skeptics question whether it is practical to maintain a full staff of traders around the clock. Woods pointed out that the majority of trading activity already concentrates around the open and close of the market, suggesting that extending the trading window might not translate into increased participation by institutional investors who may not maintain a 24-hour presence.
Woods further noted the importance of taking breaks within trading hours to allow the market to process information and ensure that all participants have an opportunity to recalibrate. “We take breaks for a reason,” he explained, alluding to the necessity of halting trading during extreme volatility to prevent disorderly market behavior.
As Nasdaq moves forward with its proposal, the debate over the implications of nearly continuous trading continues, balancing potential innovation against the risks of further complicating an already complex market structure. Market participants and observers alike will be keenly watching the SEC’s response and the broader effects such a change could engender in the evolving landscape of trading.
