Nasdaq plans 24-hour trading to serve global investors by 2026

In a landmark move to cater to active traders’ evolving needs, Nasdaq has announced plans to transition to a 24-hour trading schedule by the second half of 2026. Pending regulatory approval, the move is set to be a pivotal shift that recognizes retail traders’ market participation and affords accessibility to all types of traders, all over the world.

Outlining the decision in a recent blog post, Nasdaq President Tal Cohen explained:  “At Nasdaq, we believe our longstanding history of technology and infrastructure investments will ensure that we will bring a world-class 24-hour trading experience, with stability, capacity, and resiliency for market participants and investors.

The question is not whether we can build a market that operates 24/5, but how we do so in a way that strengthens investor confidence in U.S. capital markets today.”

According to Cohen, “retail participation” and “foreign holdings of U.S. equities” are among the core drivers prompting the change. Indeed, U.S. trading hours have often posed challenges for international investors, requiring that they adjust their schedules to participate in the market. With the introduction of 24-hour trading, Nasdaq seeks to eliminate these barriers so that investors in the active APAC and EMEA regions no longer have to trade U.S. market hours into the evening and overnight. An investor based in Tokyo, for instance, could immediately react to critical earnings news from a major U.S. tech firm released after traditional trading hours, adjusting their portfolio in real-time without waiting for the market to open. 

Given that international investors’ holdings of U.S. stocks have increased 97% since before the pandemic (as of June 2024), continuing this momentum is likely contingent on making U.S. exchanges more convenient.  Plus, U.S. financial markets are increasingly influenced by events that occur outside traditional trading hours, particularly geopolitical developments that occur within a global 24-hour news cycle and major corporate earnings releases announced after market close. The move to 24-hour trading will offer investors the flexibility to respond with timely adjustments to their portfolios and strategies — crucial for managing risk and capitalizing on opportunities in today’s multi-dimensional trading environment.

Extended Trading, Extensive Measures

While the prospect of trading round-the-clock holds promise for democratizing market access, Nasdaq recognizes the need for careful and deliberate planning in implementing the move to a 24-hour market that serves everyone. On one hand, after-hours trading is no novelty: off-exchange venues such as Alternative Trading Systems have existed for some years. But lower volumes create lower liquidity and higher volatility throughout overnight hours, which can make it harder to predict how the market will move and drive up transaction costs.

That likely explains why a considerable proportion of corporate issuers remain wary. A survey recently conducted by Nasdaq of their listed companies showed that around half had reservations about longer trading hours — and Cohen acknowledged that they would expect “a materially improved experience for their investors” in any future Nasdaq 24/5 market. 

For that, ensuring that traders have access to high-quality data is paramount. Nasdaq already serves as a premier global market data provider with a significant APAC client base, so it is well positioned to convene key stakeholders in the global retail trading community to shape the future of 24-hour market access in a way that benefits all participants.

In the near term, Nasdaq is supporting the development of overnight trading as the exclusive data partner of an upcoming platform specialized in delivering reliable and secure access to U.S. markets after traditional trading hours. In March, Bruce ATS received regulatory approval from FINRA and the SEC and is now open for business. 

By supporting initiatives like Bruce ATS, Nasdaq is aiming to strengthen the current overnight trading market and pave the way for a smooth transition to 24-hour trading. Collaboration with other industry participants will also be key. Beyond helping to build Bruce ATS, Nasdaq is working with data clients, trading firms, index clients, listed companies and ETF issuers to bring rounded experience to the 24-hour transition. The hope is that the oversight and transparency that exchanges like Nasdaq can bring will considerably improve the overnight trading experience so that it benefits not just traders, but the industry’s entire ecosystem.

As Nasdaq prepares for this significant shift, the focus remains on upholding the principles that underpin vibrant markets  — and ensuring they are felt by every type of trader in every global market. By engaging with stakeholders and leveraging technological advancements, Nasdaq is poised to redefine market operations, offering investors around the world unprecedented access to U.S. equities.

For more information on Nasdaq's move towards a 24-hour market, you can read the op-ed here. 

To explore the new data services offered by Nasdaq for Bruce ATS, visit data.nasdaq.com/BruceATS