There was an element of work-life balance in how markets operate until now. Yes, digital assets may not sleep, but traditional equities usually stop trading at 4pm Eastern Standard Time (ET). To meet the growing demand for U.S. equities, Nasdaq, the second largest stock exchange in the U.S., is considering offering 24-hour trading to investors.
Currently, Nasdaq is open from 9:30 AM to 4:00 PM ET, Monday to Friday. There are also pre-market and after-hours trading sessions, these are sometimes referred to as extended markets. To augment normal trading certain brokers have access to pre-market trading hours from 4:00 AM to 9:30 AM ET, as well as after-hours runs from 4:00 PM to 8:00 PM. Clearly, this is proving insufficient to meet demand.
The Markets Never Sleep, Should Trading at Nasdaq?
Tal Cohen, President of Nasdaq, posted on LinkedIn how Nasdaq will enable 24-hour trading. He stipulates that this is pending regulatory approval and might not happen till the second half of 2025. It also only covers 24-hour trading during the week, not on weekends. More 24/5 than 24/7.
“At Nasdaq, we are ready to meet the opportunities and challenges that extending trading hours present by doing what we have always done – embracing innovation while maintaining the integrity of our markets,” Cohen wrote.
Nasdaq isn’t the first exchange to explore this opportunity. In late 2024 the New York Stock Exchange ran a survey to gauge interest in 24-hour trading. Findings from the largest U.S. stock exchange confirmed that 24/5 trading rather than 24/7 would be the preferred approach.
What are the Benefits of 24-hour Trading?
With digital assets there has been an increase in day trading. This increase has also seen increased market liquidity. Importantly, having more time and opportunity to invest for retail investors may level the playing field between them and institutional investors.
Charles Schwab is another financial institution offering extended opening hours. The firm offers extended and overnight (24/5) trading of over 800 equities, including all stocks in the S&P 500, Nasdaq 100, and Dow 40, plus over 200 exchange-traded funds (ETFs). Robinhood offers a similar service as well.
Schwab sees the benefits for investors as being the flexibility to trade on your schedule, as well as the ability to react in real time to news and events.
However, there are drawbacks. Chief among them, the heightened risk of cyber-attacks.
The Future is Bright, the Future is 24/5
Those of us who have experienced the sharp volatility of digital assets such as bitcoin, can attest to the challenges that 24/7 trading poses. Sometimes when you go to bed the price can change by up to 5% by the time you wake up. Even on the weekends.
With a five-day trading week there is an underlying consideration for the effects of risk-taking. Today there are rising numbers of younger people investing in stock markets. Particularly amongst those below 40. Reddit, and other social media platforms have been partially to blame. Just think Gamestop.
It was inevitable then that one day the largest exchanges would take note and try to facilitate the growing demand. In ten years, 24/5 may well be the industry standard rather than the exception it is being looked at as today.
Author: Andy Samu
#Nasdaq #RetailInvestors #InstitutionalInvestors #StockExchange #Gamestop #CharlesSchwab #Equities
See Also:
Nasdaq – Where do Unicorns go to become famous? | Disruption Banking
What Does The Texas Stock Exchange Offer Investors? | Disruption Banking
Speculative fictions: GameStop, Bitcoin and beyond | Disruption Banking
