. Investors have operated within a fixed schedule, trading primarily between 9:30 a.m. and 4:00 p.m. Eastern Time Monday through Friday. However, that tradition may soon shift dramatically. Nasdaq plans to introduce 24-hour trading in late-2026, allowing equities to be bought and sold at any time of day or night. If successful, this change could fundamentally alter how global markets operate and how investors engage with them.

Current System vs. 24-Hour Trading

Currently, U.S. equity markets offer limited after-hours and pre-market trading sessions outside regular hours. These sessions allow some trading flexibility but are often characterized by lower liquidity, higher volatility, and wider spreads. They are primarily used by institutional investors, while retail participation remains limited.

The proposed round-the-clock trading system would vastly expand access, extending trading hours for 24/5, 24 hours a day, Monday through Friday. This would represent a major shift from today’s segmented structure to a continuous, global model, similar to cryptocurrency markets. Nasdaq’s move toward 24-hour trading follows in the footsteps of both the New York Stock Exchange and Cboe, which have already announced extended trading hours to better accommodate global demand. These earlier initiatives signal a broader industry shift toward making U.S. equity markets more accessible to international investors, especially those in the Asia-Pacific region who want to trade during their daytime hours.

Why 24-Hour Trading?

There are several motivations behind Nasdaq’s push. The primary advantage of 24-hour trading is increased flexibility for investors. Retail and institutional investors alike could react to news events, earnings reports, or geopolitical developments without having to wait for the market to open. This could improve risk management and allow for more dynamic portfolio adjustments.

Additionally, Global demand for U.S. equities has grown steadily, especially among investors in Europe, Asia, and the Middle East. A 24-hour trading window could better serve these international investors by removing time zone barriers.

As more individuals enter financial markets through online platforms, expectations for real-time access and immediate execution have risen. There is a broader cultural shift toward always-on financial systems, and traditional market hours increasingly feel restrictive in a digital, globalized economy. Nasdaq’s initiative aims to capitalize on these trends, providing convenience, enhancing liquidity during non-traditional hours, and potentially increasing overall trading volume.

Expanded trading hours may lead to greater liquidity over time, as more participants around the world engage in the market. Higher liquidity can contribute to narrower bid-ask spreads and potentially lower transaction costs.

The Challenges and Risks Ahead

Despite these potential benefits, round-the-clock trading introduces significant challenges. Liquidity may not materialize evenly across all hours, particularly during the initial rollout. Thinly traded periods could experience extreme volatility, making prices less stable and heightening the risk for investors. There is also concern that 24/7 trading could encourage overtrading and impulsive investment behavior, as markets would no longer provide natural breaks to discourage emotional decision-making.

Moreover, the traditional market structure has built-in mechanisms, such as the opening and closing auctions, that help discover prices efficiently and absorb shocks. Without these anchors, it could become harder to set fair, transparent prices, especially for less liquid securities. Operational risks, such as system outages or security breaches, also increase when markets are open continuously. Regulators may need to reassess current rules to address new forms of risk created by the absence of scheduled downtime.

What Comes Next for Markets

If Nasdaq’s 24-hour trading plan succeeds, other exchanges may eventually follow, leading to a widespread transformation of global financial systems. However, the transition is unlikely to be seamless. Building trust, liquidity, and strong safeguards will be essential to ensure that round-the-clock markets deliver on their promise without exposing participants to excessive risk.

In the Classroom

This article can be used to discuss stock markets (Chapter 16: Financial Management and Securities Markets).

Discussion Questions

  1. How does the current system of pre-market and after-hours trading differ from Nasdaq’s proposed 24-hour trading model?
  2. What motivations are driving Nasdaq to introduce round-the-clock trading?
  3. What are some potential benefits and potential risks of allowing investors to trade equities 24 hours a day?

 

This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.