As U.S. exchanges, clearinghouses and market plumbers map out the tech path and infrastructure, some major U.S. dealers are raising questions about the risks of such a move that would require tens of billions of dollars in investment, with little guarantee of a huge payday, according to interviews with half a dozen executives at U.S. banks including JPMorgan, Bank of America and Morgan Stanley, who requested anonymity to discuss the matter.“It’s seen as more of a nuisance than something that will drive revenue for these companies,” said Patrick Moley, senior research analyst at Piper Sandler. “Banks and brokers will need to roll out additional technology and support capabilities. And at this point, it’s difficult to know how quickly they’ll see a return on that investment.”
Banks and broker-dealers are evaluating the costs, benefits and risks associated with enabling 24-hour trading. In recent weeks, some top executives have expressed concerns about managing risks around major market-moving events.
“We need to make sure we have the right risk management protections in place to handle events… before we actually unleash this on the market,” said Sonali Theisen, global head of FICC E-Trading & Markets Strategic Investments at Bank of America, on a recent panel discussion hosted by the U.S. Securities and Exchange Commission.
BENEFITS FOR INVESTORS OUTSIDE THE US Proponents of the move to 24-hour trading have argued that it will allow retail and institutional investors – especially those based outside the US – to respond more quickly to news emerging outside US market hours. However, market structure experts and executives at major banks warn that the quality of trading will be affected by the limited liquidity available in the short term, which could make prices less accurate and throw demand into question. “We’re not going to change all of our systems and all of our end-of-day processes and expand everything and hire people to work overnight,” said Brian Suth, head of electronic trading at Evercore ISI, who said he currently sees no institutional demand for such trading. BlackRock executives said in a white paper this year that overnight sessions are less liquid than normal market hours, which can result in wider bid-ask spreads, increased volatility and higher trading costs.
“I don’t know that many companies will insist on being there on day one. But I think your hand may be forced over time if there is significant liquidity to interact with,” said Michael Masone, head of North American market structure at Citi, adding that Citi has started preparing for 24-hour trading.
STOCK MARCHES GET READY FOR ACTION Wall Street’s biggest exchanges have begun laying the groundwork to enable longer-term trading. Nasdaq’s move on Monday follows the New York Stock Exchange last year, which said it would offer 22-hour trading on its Arca stock platform on weekdays, a proposal approved by the SEC this year. A successful rollout of 24-hour trading by the end of 2026 depends on a major update to the securities information processor that displays the most accurate prices for stocks on US exchanges at the time of such trades. The US Depository Trust and Clearing Corp., the main clearing center for the US stock markets, plans to roll out non-stop stock clearing by the end of 2026. In a recent white paper, DTCC and Ernst & Young predicted that 1% to 10% of total US equity volume will trade during extended hours by 2028.
LONG-TERM DEMAND The move toward 24-hour trading has accelerated this year as the SEC, led by Chairman Paul Atkins, has sought to roll back what it sees as burdensome regulations that have hampered the expansion of U.S. financial markets.
“I don’t think it’s an exaggeration to say that in a few years we’ll be trading around the clock, and all the market participants will already be coming,” said Steve Quirk, chief brokerage officer at Robinhood.
Stephen Berger, global head of government and regulatory policy at Citadel Securities, said the company would meet demand for such trading.
“If there is demand from investors… to trade outside of regular trading hours, our job is to be there to provide investors with the best execution quality and the best execution experience,” Berger said.
Some executives said overnight trading could eventually grow into a billion-dollar business for Wall Street — even if that doesn’t happen in the near term.
“Will this take off in 2026? Probably not. Could it take off in 2027? Yes. Will it be a significant market in 2028? I think so,” says Citi’s Masone.
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