Nasdaq is edging closer to offering nearly round-the-clock stock trading, a move some in the Wall Street community deem unnecessary and potentially disruptive.
The exchange has announced plans to file paperwork with the Securities and Exchange Commission (SEC), seeking permission for U.S.-listed stocks and exchange-traded products to trade nearly 24 hours a day, five days a week. Should it receive approval, the new trading schedule could commence in the second half of 2026.
Under the proposed plan, Nasdaq would extend trading hours from the current 16 to 23 hours each weekday. The trading would occur in a "day session" spanning from 4 a.m. to 8 p.m. Eastern Time, followed by a one-hour break for essential activities like maintenance and testing. A "night session" would then kick off from 9 p.m. to 4 a.m. the next morning.
Critics argue that implementing nearly continuous trading may exacerbate existing issues within equity markets, such as thin liquidity, volatile price movements, and the increasing trend toward market gamification.
Describing the proposal as the "worst thing in the world," the Wells Fargo trading desk expressed concerns, stating in a note to clients, "I cannot think of an action that single-handedly gamifies the stock market even more than it has already become. This is the epitome of making trading even more like gambling."
Jay Woods, chief market strategist at Freedom Capital Markets and a former market maker on the New York Stock Exchange floor, voiced worries about the implications for listed companies. "Listed companies need a time to break and release news events and to have meetings where they're not moving markets, and now we're taking that away from them," Woods said. "You're opening up a new can of worms."
Currently, Nasdaq operates three trading sessions on weekdays: 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.
Retail brokers like Robinhood have already introduced extended or near-24-hour trading for some U.S. stocks and cryptocurrencies, responding to retail investors' demand to trade on global news anytime.
The New York Stock Exchange (NYSE) is developing its extended-hours model, targeting 22 hours of weekday trading and gaining initial SEC approval contingent on data-feed upgrades.
Wells Fargo notes that most liquidity already concentrates around market opening and closing times, questioning the efficacy of lengthening trading hours further. "Most of the complaints I hear on market structure are about how bad volumes are as most comes in around the open and close," the note stated. "And the industry move is to then elongate the trading day even further? This makes no sense at all."
Nasdaq claims that extended hours could eventually draw more participants, yet skeptics wonder if firms would need to staff trading desks continuously. "We know between 9:30 and 4, most traders are at their desk. The biggest institutions are working," Woods said. "Are we going to have to add a whole new ecosphere of traders and institutions to man the desks so they can participate around the clock?"
Woods highlights that trading pauses serve a purpose, allowing markets to process information and participants to reset. "We take breaks for a reason," Woods stated. "Let's recharge the batteries. Let's all get on the same page. We already have volatility... during the day. If things move too far, too fast, we take a pause."