TheCorporateCounsel.net

When I first heard of 24-hour equities trading, I had a bit of a panic attack, and I don’t think I was alone. Now that we’re getting closer to 23/5 trading, I understand and appreciate that the new overnight trading hours are really just an extension of existing pre- and post-market trading hours. And that does make me feel better because I’ve never gotten an emergency call at 5 am that a client’s stock price is changing on no news, even though “the tape is running” that early. (Hopefully, I am not an outlier?!)

But the feeling of panic is hard to shake. Thankfully, yesterday’s SEC Roundtable on Preparations for 24-Hour Trading was somewhat reassuring. Though it kicked off with Commissioner Peirce vocalizing my fears in her remarks, saying, “There are more fundamental human concerns, like sleep. Extended trading hours will amplify worries about a data feed going down at 3 am or social media rumors tanking your stock while your corporate office slumbers.” Thank you for making me feel seen and calling for this roundtable, Commissioner Peirce!

Here are my top takeaways from the three discussions (from my live notes):

1. 23/5 trading is 79 days away. U.S. exchanges, including the Nasdaq Stock Market, Cboe EDGX, NYSE Arca and 24X, are rolling out 23/5 trading on Sunday, December 6.

2. From 4 am to 8 pm ET, nothing changes. Dan Mathisson, of the SEC’s Division of Trading and Markets, Office of Analytics and Research, explained that the open and close of regular hours are the same. The closing price is the same. He sees no reason for current practices, like releasing earnings after the close of regular market hours, to change. (Though a panelist later noted that issuers may reconsider after-market disclosures if they start to cause undesired volatility overnight. More on that below.)

3. Trading hours are only going up 20%. Existing trading hours currently comprise 48% of the week. Under 23/5 trading, trading hours will comprise 68% of the week.

4. Near-continuous trading is already a reality. Some foreign markets and crypto exchanges operate continuously or nearly continuously. Even U.S.-listed equities have near-continuous trading, between existing pre- and post-market hours on U.S. exchanges and overnight equity trading in NMS stocks on Bruce Alternative Trading System (ATS), MOON ATS or Blue Ocean ATS, the three primary after-hours/overnight trading venues for U.S. equities. That overnight trading on ATSs has been around since 2021.

5. Existing overnight trading is slim but growing and will likely increase with the December 6 launch. In August 2026, just less than 1% of total NMS share volume traded in the overnight session on an average trade date, which reflected a 359% increase year‑over‑year. Overnight trading is dominated by foreign investors (37%). U.S. individuals are 9%, and U.S. institutions are only 7%. While institutional participation in overnight is very limited, institutions are very active from 4 pm to 8 pm. Retail participation is self-directed, not advisor-driven.

The hour with the heaviest overnight trading volume is the 8 to 9 pm window, which is the one hour the exchanges will be closed.

The overnight market (by volume) is mostly low-priced stock. Nine of the top 10 equities traded overnight by volume were subdollar stocks that were still NMS listed and mostly domiciled in Asia. (By dollar value, on the other hand, the top 10 more closely match the top 10 in the regular session.) See this memorandum from the Staff with data on NMS stock activity during the overnight trading session.

6. Large institutional investors and asset managers may initially not participate in overnight trading. BlackRock expects overnight trading to be predominantly led by retail and foreign investors and institutional activity to be event-driven or reactive in nature, so it will be monitoring overnight sessions for market quality and to see if sufficient liquidity develops for institutional-size order flow. December 6 is neither a “big bang” where everything changes, nor is it the end of the story, as market structure and participation will continue to evolve.

7. Preparing for 23/5 trading has promoted harmonization. The corporate action trading halt rules were cited multiple times as an improvement to current procedures and an important example of the harmonization that market participants are working towards so that overnight trading is subject to consistent rules and protections across venues.

8. Overnight hours will include Limit Up-Limit Down (LULD) protections. They’ll operate slightly differently in overnight trading. Trades can happen within a 20% price band, and orders will be rejected outside that band. Market participants plan to monitor this price band and compare it to existing pre-market hours beginning at 4 am, which do not have bands, to consider making these bands more dynamic. That’s because it’s expected that overnight hours will be used to trade around significant news events that come out after hours and there’s concern about limiting price discovery.

9. The main risk to public companies is volatility. Tim Quast from ModernIR, which focuses on supporting US-listed companies with quantitative analytics of equity market behavior, provided the sole perspective from the issuer community on any of the three panels. He expressed concerns that even the existing plan for a 20% band was not sufficient volatility protection from the issuer side. Even when there’s big news, he said, “you don’t want the crowd asleep.” He noted that the process would benefit from the LULD committee seeking the public company perspective.  

10. There’s capital formation upside for public companies. The “optionality” of 24-hour trading that many panelists touted doesn’t apply to issuers, which will start seeing their stock trade overnight whether they want it to or not, but overnight trading does have the potential to bring new investors into a stock. The key will be liquidity and stability in overnight markets, as Tim Quast’s submitted comment letter notes. 

– Meredith Ervine