MW One of the last obstacles to 24-hour stock trading is about to fall

By Joseph Adinolfi and Gordon Gottsegen

A key player in the U.S. stock market has decided to ask the SEC for permission to extend its hours of operation as close as possible to 24 hours a day, five days a week

The financial-services industry is about to take a major step toward making 24-hour stock trading a reality accessible to all investors.

Earlier this week, the operating committees of the Securities Information Processors published a statement declaring their intention to ask the Securities and Exchange Commission for permission to extend the operating hours of the SIPs - the public data feeds that record trading activity and broadcast prices to investors - to as close to 24 hours a day as possible.

If the SEC signs off, it would open the door for all U.S. equity exchanges to offer nearly around-the-clock trading.

Under the new regime, trading would run from 8 p.m. Eastern time on Sunday through 8 p.m. Eastern time on Friday, with only a single one-hour technical pause each day to process things like corporate actions - for example, dividend-related housekeeping and any changes arising from mergers and acquisitions - and other housekeeping issues.

"We know the industry is eager to move toward 24-hour trading, and the SIPs are determined to make the changes necessary to make available the market data that will facilitate that," said Jeff Kimsey, chairman on the SIP Operating Committees, in the statement.

This latest announcement represents a notable shift from just two months ago, when the SIPs operating committees voted against several similar proposals brought by members.

What are the SIPs?

The SIPs are an important, if obscure, component of the broader financial-markets infrastructure in the U.S., and have been since the 1970s.

In the U.S., the feeds - there are two of them, although people in the industry often refer to a singular "SIP" - collect and disseminate data on all U.S. equity trades from major exchanges, as well as those placed in the over-the-counter market. All these quotes are consolidated and used to calculate the National Best Bid and Offer, which represents the highest bid price and lowest offer price for a given security across all exchanges and liquidity providers.

U.S. equity exchanges can't operate unless the SIPs are up and running, which is why this decision is so important.

Still, there are a few things that need to be resolved before the operating committees can move ahead.

Of course, the SEC must sign off. Once filed, the regulatory agency will have up to 300 days to render a decision. A representative for the SEC didn't respond to a request for comment.

The operating committees have also stipulated that the Depository Trust & Clearing Corporation must agree to offering clearing services around the clock as well.

Val Wotton, managing director and general manager of institutional trade processing at the DTCC, said that the decision from the SIPs operating committees marks an important step toward 24-5 trading.

"DTCC supports the alignment around a standard trading day, and the SIP's recent announcement marks an important step in this journey. Now, the significant work begins around the path to implementation," Wotton said in a statement.

Will the market still need an opening bell if trading is 24 hours?

After 24-hour trading becomes a reality, what will become of the opening and closing bells?

A spokesperson for Nasdaq Inc. $(NDAQ)$ said the timing of the market open and close wouldn't be affected by the additional hours. The market still needs to observe a daily open and a daily close to set benchmarks for certain things, like options exercise and trade settlement. Exchanges must also provide reliable benchmark prices for the daily performance of stocks and funds.

See: Nasdaq wants to launch 24-hour trading Monday through Friday. Here are the challenges it faces.

Right now, it's unclear exactly where exchanges will draw the line between one trading session and the next. A representative for the New York Stock Exchange, which is owned by Intercontinental Exchange Inc. $(ICE)$, didn't return a request for comment.

"The industry is working towards introducing 24-5 equities trading in a thoughtful manner. Global investor demand for U.S. equities access remains strong and Cboe continues to engage with market participants to prepare for a smooth implementation," said Oliver Sung, head of North American Equities at Cboe Global Markets Inc. $(CBOE)$, in a statement shared with MarketWatch.

How might this impact investors?

While a handful of trading platforms already offer overnight or 24-hour trading, brokerages mostly route orders placed during the overnight session to alternative trading systems, or ATSs. Overnight trading begins after 8 p.m. Eastern time.

With the SIPs change, more exchanges will be able to operate in extended hours, making the overnight-trading experience similar to trading during the day. Ultimately, this could help boost volume and liquidity.

"At the highest level, this move from the SIPs is a great thing for the industry and, ultimately, the retail trader, because it will allow the overnight session to function much more like the core daytime trading session," James Kostulias, head of trading services at Charles Schwab Corp. $(SCHW)$, told MarketWatch.

The shift should make it easier for international investors - and particularly those based in Asia, where the trading day doesn't really overlap at all with the U.S.

"If you're in Korea, it's pretty difficult to work all day then stay up all night and try to trade the U.S. market," said Bill Capuzzi, chief executive of Apex FinTech Solutions and a member of the DTCC board of directors. Apex operates an ATS called Bruce.

Brian Hyndman is the president and CEO of Blue Ocean, an ATS that has been providing access to overnight trading since 2021. Over the years, he's watched as more exchanges and financial institutions have expanded their trading hours to move toward 24-hour trading. He says that this trend is the result of a world where technology is modernizing the way investors get information.

"The U.S. equity space is modernizing. Information is coming out real-time; it doesn't just come out Monday through Friday from 9:30 a.m. to 4 p.m.," Hyndman told MarketWatch. Social-media posts from President Trump, announcements from Chinese AI companies and other market-moving events are happening around the clock, he noted - so traders want access to markets around the clock, too.

"I think the U.S. equity markets are evolving and they're giving traders the ability to manage their risk real-time as that information comes out," Hyndman said.

To be sure, not all traders are excited about the shift. Tony Ng, a day trader based in Hong Kong, told MarketWatch that he's worried about whether the advent of 24-5 trading on major exchanges might make some of his favorite strategies less effective.

"Many popular day-trading strategies are based on scanning premarket gap-ups for stocks in play. If the switch is to continuous regular hours throughout the day, then premarket gap-ups and opening price ranges would no longer be a thing, and day traders who trade these strategies like myself will need to adapt," Ng told MarketWatch via email.

But anybody anxious about the shift need not worry just yet. According to Capuzzi, the changeover likely wouldn't take place until late next year, assuming the SEC signs off.

But once it happens, Capuzzi believes the exchanges could quickly move to add Saturday and Sunday trading, as well.

-Joseph Adinolfi -Gordon Gottsegen

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May 09, 2025 07:00 ET (11:00 GMT)

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