Nasdaq Announces Plans for 24-Hour Trading to Capitalize on Global Market Demand
- Nasdaq plans 24-hour trading by 2026 to meet growing global demand for U.S. equities.
- Over $17 trillion in foreign holdings of U.S. stocks highlights global investor interest.
- Nasdaqs extended hours aim to enhance liquidity and market access across time zones.
Nasdaq announced its decision to expand trading hours across all five business days, with operations running throughout 24 hours. The planned shift, expected in the second half of 2026, aims to meet increasing global interest in U.S. equities and Nasdaq-linked exchange-traded funds (ETFs). The decision, which requires regulatory approval, reflects the increasing need for more accessible trading options across global markets.
Global Demand for U.S. Equities Drives Change
According to Nasdaq President Tal Cohen, international demand for U.S. equities has surged, with foreign holdings of U.S. stocks hitting $17 trillion during June 2024, representing a 97% increase from 2019. The Nasdaq-100 index-linked exchange-traded funds (ETFs) have gained substantial market demand as more than 56 new products launched in the past five years, most of which came from outside the United States.
According to Cohen the rising involvement of worldwide retail investors was at the forefront of the market movement. This change aims to synchronize the companys trading period with worldwide financial market dynamics, allowing investors from different time zones to trade in real-time. Cohen acknowledged that corporate issuers have expressed their concerns regarding market volatility alongside reduced liquidity brought by extended trading hours.
Addressing Liquidity and Volatility Challenges
Nasdaq will encounter difficulties implementing 24-hour trading due to preserving sufficient market liquidity and reducing trading volatility during non-peak hours. The trading period outside traditional U.S. business hours faces criticism due to diminished market volume, leading to imprecise pricing and higher transaction expenses. While regulators and industry members maintain investor confidence, the company operates closely with them to address these risks.
The SEC and other stakeholders will lead the implementation of the required infrastructure, including new updates for the securities information processor that maintains real time price data. Trade systems at Cboe Global Markets and the New York Stock Exchange have joined the company in expressing plans to expand trading hours to the full 24 hours of the day.
Nasdaqs Strategy and Future Implications
The adoption of 24-hour trading at Nasdaq demonstrates that traditional financial entities are integrating with digital assets to connect more with the market. The transition contributes to improved market liquidity and determines the prices of cryptocurrency-linked products, including Bitcoin ETFs which have become increasingly popular recently. The company intends to attract additional institutional investment into U.S. markets with its initiative for continuous trading operations.
The company is positioning itself to become the initial nationwide U.S. stock marketplace with 24 hour market access by departing from its typical scheduled 9:30 a.m. until 4:00 p.m. Eastern Time session.
Read more: https://www.tronweekly.com/nasdaq-announces-plans-for-24-hour-trading/
Text source: TronWeekly
