In a significant move poised to redefine the landscape of global equity markets, Nasdaq (NASDAQ: NDAQ) has formally submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to extend its weekday trading hours to a remarkable 23 hours. This ambitious initiative, dubbed the "5x23 model," aims to address the escalating global demand for access to U.S. equities and to modernize market operations in line with an increasingly interconnected, 24/7 news cycle. If approved, this expansion from the current 16-hour trading day could fundamentally alter market dynamics, enhance international participation, and usher in a new era of continuous price discovery, with a target launch in the second half of 2026.
The proposal comes at a time when foreign holdings of U.S. stocks are substantial, and investors worldwide are seeking greater flexibility to react to market-moving events in their local time zones. Nasdaq's move is a strategic response to the "always-on" nature of cryptocurrency and forex markets, as well as growing competition from alternative trading systems and rival exchanges also exploring extended hours. While promising increased accessibility and efficiency, the transition also introduces complex operational challenges for market participants and regulators alike, demanding substantial upgrades to critical market infrastructure and a re-evaluation of established trading norms.
Detailed Coverage: The Mechanics of a Continuous Market
Nasdaq's proposal, formally submitted on December 15, 2025, a day prior to the current date of December 16, 2025, outlines a radical restructuring of the trading day. The core of the "5x23 model" involves dividing the trading week into two primary sessions, separated by a crucial one-hour break for system maintenance and trade clearing:
- Day Session: This extended session would run from 4:00 a.m. to 8:00 p.m. Eastern Time (ET), encompassing the existing pre-market, regular market (9:30 a.m. to 4:00 p.m. ET), and after-hours trading periods. The traditional opening and closing bells for the regular market would remain in place.
- One-Hour Break: A necessary operational pause would occur between 8:00 p.m. and 9:00 p.m. ET.
- Night Session: A new, overnight trading window would operate from 9:00 p.m. to 4:00 a.m. ET the following calendar day. Notably, trades executed during the initial hours of this night session (between 9:00 p.m. and midnight) would be recorded as activity for the subsequent calendar day.
Under this proposed model, the trading week would effectively commence on Sunday at 9:00 p.m. ET and conclude on Friday at 8:00 p.m. ET. This represents a significant departure from the current 16-hour setup and reflects a strategic push to capture global liquidity.
The timeline leading up to this proposal highlights a broader industry trend. In February 2025, the New York Stock Exchange (NYSE: ICE), a major competitor, received initial SEC approval for its own plan to implement a 22-hour weekday trading schedule. By March 2025, Nasdaq President Tal Cohen publicly confirmed the exchange's intentions to pursue a near-continuous trading model, anticipating a launch in the second half of 2026. The formal submission to the SEC on December 15, 2025, marks a critical regulatory step. The successful implementation is contingent on several factors, including SEC approval and significant infrastructure upgrades, particularly from the Depository Trust & Clearing Corp. (DTCC), which plans to offer 24-hour clearing services by mid-2026, and the Securities Information Processors (SIPs), which must extend their operational hours for continuous data feeds.
Key players and stakeholders involved in this transformative proposal include Nasdaq Inc. (NASDAQ: NDAQ) as the primary proponent, the U.S. Securities and Exchange Commission (SEC) as the regulatory gatekeeper, and Nasdaq executives like Tal Cohen and Chuck Mack, Senior Vice President of North American Markets. Rival exchanges such as the New York Stock Exchange (NYSE: ICE) and Cboe Global Markets (CBOE: CBOE) are also actively exploring or have proposed similar extensions, intensifying the competitive landscape. Crucial market infrastructure providers like the DTCC and SIPs are indispensable partners whose operational readiness is paramount. Additionally, retail brokers like Robinhood Markets (NASDAQ: HOOD) and Interactive Brokers (NASDAQ: IBKR), who already offer some form of 24/5 trading on alternative venues, have demonstrated existing investor demand, while major Wall Street banks have reportedly expressed caution due to operational complexities and potential costs.
Initial market and industry reactions to Nasdaq's proposal are mixed. Proponents emphasize the benefits of meeting surging global demand for U.S. equities, facilitating faster price discovery, and modernizing markets to compete with 24/7 asset classes like cryptocurrencies. They foresee enhanced liquidity and potentially tighter spreads. However, concerns have been raised by Wall Street banks and market makers regarding potentially diluted liquidity and heightened volatility during the newly added overnight hours, which could lead to wider bid-ask spreads and increased operational costs for risk management and staffing. The significant infrastructure hurdles, particularly for clearing and data dissemination, remain a major point of discussion, as does the potential impact on options trading, which is not directly covered by this proposal but could be indirectly affected by underlying stock movements.
Winners and Losers: Corporate Impacts of 23-Hour Trading
Nasdaq's proposed 23-hour trading model, aiming for a 2026 launch, is set to create distinct winners and losers among public companies, fundamentally reshaping operational strategies and competitive advantages across the financial sector.
Potential Winners:
- Companies with Significant International Investor Bases: Large, globally recognized technology firms listed on Nasdaq are poised to be major beneficiaries. Companies like NVIDIA (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN) attract substantial foreign investment. The extended hours will allow investors in Asia, Europe, and other time zones to trade during their local business hours, eliminating the need to react to market-moving news or earnings reports with significant time lags. This increased accessibility could boost liquidity for their stocks, potentially attracting more foreign capital and improving valuations, while also providing a more responsive market for their stock price movements in response to global events.
- Brokers and Trading Platforms (especially those with robust technology): Brokerage firms that successfully adapt their systems and services to offer 23-hour trading are likely to gain a competitive edge. Retail brokers such as Robinhood Markets (NASDAQ: HOOD) and Interactive Brokers (NASDAQ: IBKR), which already provide some form of 24/5 trading on alternative venues, have demonstrated the market appetite for flexible access. Increased trading activity and client engagement can lead to higher commission revenues and market share for these firms. Those investing in scalable and secure technology will be better positioned to manage continuous trading flows and provide enhanced execution services.
- Financial Technology (FinTech) Providers and Infrastructure Companies: Companies specializing in trading technology, data dissemination, risk management systems, and cybersecurity will experience a surge in demand. The transition necessitates substantial upgrades to market infrastructure, including the Securities Information Processors (SIPs) for non-stop data feeds and the U.S. Depository Trust and Clearing Corp. (DTCC) for 24-hour clearing services. This translates into new business opportunities for firms offering solutions in real-time market data analytics, automated trading, robust cybersecurity, and scalable cloud infrastructure for financial services.
Potential Losers:
- Smaller Brokers and Market Makers (less technologically advanced): The shift to extended hours demands significant investments in technology, staffing, and operational infrastructure to maintain continuous service and manage increased risks. Smaller brokers or market makers lacking the capital or technological capabilities to make these upgrades may struggle to compete. Market makers, in particular, face concerns about lower liquidity and higher volatility during non-traditional hours, which could lead to wider bid-ask spreads and increased operational costs to manage risk effectively. These firms might face reduced profitability and a loss of market share.
- Public Companies with Limited Investor Relations Resources: While faster reaction to news is a benefit, it also means a nearly constant news cycle. Smaller public companies with limited investor relations and public relations teams might struggle to manage communications and respond to market movements that occur outside traditional business hours. Delayed or insufficient responses to breaking news or earnings reports released during the night session could lead to increased volatility and misinterpretation of company information, potentially disadvantaging their stock price.
- Companies Dependent on Traditional Trading Structures: Some companies or investment vehicles might be structured around the traditional 9:30 a.m. to 4:00 p.m. ET trading day. Investment strategies heavily reliant on opening and closing auctions, or products traditionally executed at market close, may face challenges as the concept of a "trading day" becomes less defined. A shift in market dynamics could require a re-evaluation of trading strategies, corporate action processes, and daily valuations, potentially incurring costs and operational adjustments for these companies.
In essence, the 23-hour trading proposal will reward adaptability and technological prowess, while potentially penalizing those unable or unwilling to invest in the necessary infrastructure and operational changes.
Wider Significance: A Global Market in Flux
Nasdaq's proposal is far more than a simple extension of trading hours; it is a pivotal development within a broader, accelerating industry trend towards continuous global trading. This initiative signifies a structural reimagining of how capital flows across international borders, driven by globalization, technological advancements, and evolving investor expectations.
The move fits squarely into the trend of globalization of markets. Foreign investors' substantial holdings in U.S. stocks underscore a persistent demand for access during their local business hours. By offering a true overnight exchange session, Nasdaq aims to capture this global liquidity, which currently often diverts to fragmented off-exchange venues. This also aligns with the rise of retail trading and 24/7 expectations, largely influenced by the always-on nature of cryptocurrency and foreign exchange markets, and the accessibility offered by modern electronic trading platforms.
The ripple effects on competitors and partners will be profound. The New York Stock Exchange (NYSE: ICE) and Cboe Global Markets (CBOE: CBOE) are already exploring or have received initial approval for similar extended-hours models, indicating a competitive race that could lead to an industry-wide shift. This competition will force all exchanges to adapt to maintain relevance and attract trading volumes. Brokers and market makers will face immense operational challenges, needing to upgrade systems, manage fragmented liquidity, and address potential volatility during off-peak hours. Crucially, market infrastructure providers like the DTCC and SIPs are indispensable partners whose readiness for 24-hour clearing and data dissemination is paramount for the entire ecosystem to function. For international markets, such as India, the continuous trading in U.S. equities could reshape how local markets respond to global cues, potentially leading to increased opening gaps and short-term volatility in globally sensitive sectors.
From a regulatory and policy perspective, the proposal requires careful scrutiny and approval from the U.S. Securities and Exchange Commission (SEC). The SEC's primary concerns will revolve around infrastructure readiness, market quality, and investor protection. Regulators will assess potential issues like lower liquidity, higher volatility, wider spreads, and the risk of market manipulation during extended hours. Ensuring fairness, transparency, and the consistent application of best execution rules across extended hours will be critical. The World Federation of Exchanges has previously cautioned against 24/7 trading, citing concerns about market quality and investor protection, highlighting the need for robust safeguards like circuit breakers and trading protections.
Historically, U.S. stock trading hours have evolved significantly. While Saturday trading was once common until 1952, and after-hours trading gained traction in the 1990s, the current proposal marks a more radical departure. Modern precedents include alternative trading systems (ATSs) and retail brokers already offering 24/5 trading for certain securities, such as Robinhood Markets (NASDAQ: HOOD) and Interactive Brokers (NASDAQ: IBKR). Notably, 24X Exchange has received preliminary SEC approval to operate as a national securities exchange offering 23x5 trading, setting a direct precedent for Nasdaq's current move. This continuous trading model aims to align U.S. equities more closely with the "always-on" global asset classes like forex and cryptocurrency, signifying a profound shift in market structure.
What Comes Next: Navigating the New Frontier of Trading
The path forward for Nasdaq's 23-hour weekday trading proposal is multifaceted, involving regulatory approvals, technological adaptations, and a re-evaluation of market strategies. The outcome will shape not only Nasdaq's future but also the broader global financial landscape.
In the short-term, if the SEC grants approval, the market can expect initial phases of extended trading to be characterized by faster price discovery and increased accessibility for international investors. This will allow quicker reactions to global news and earnings reports, potentially reducing the impact of overnight gaps. However, concerns about lower liquidity and higher volatility during the newly introduced night sessions are likely to manifest, leading to wider bid-ask spreads and increased slippage. Active traders may find new arbitrage opportunities, but also face heightened risk management challenges.
Long-term possibilities point towards a fundamentally redefined global equity market. With U.S. equities representing a significant portion of global market value, this expansion is seen as a natural evolution towards a more integrated and continuously accessible global market. Analysts predict that extended trading could eventually become a multi-billion-dollar business for Wall Street, even if initial returns are modest. The move also serves as a strategic response to prevent capital outflow to other "always-on" asset classes like cryptocurrencies.
Strategic pivots and adaptations will be required across the financial ecosystem. Active traders must refine their strategies to account for varying liquidity and volatility across sessions. International investors will benefit from trading U.S. stocks in real-time during their local business hours. Asset managers will need to upgrade trading systems, reengineer portfolio strategies, and manage continuous liquidity. Brokers and institutional investors face significant infrastructure investments for technology, cybersecurity, and 24/7 staffing, along with adapting supervisory frameworks and best execution standards. Critically, the Depository Trust and Clearing Corporation (DTCC) and Securities Information Processors (SIPs) must complete their planned upgrades for 24-hour clearing and data dissemination, respectively, by mid-to-late 2026 for the system to function effectively.
Emerging market opportunities include enhanced global access, new arbitrage and hedging possibilities, and Nasdaq's ability to capture trading volumes currently occurring on fragmented off-exchange venues. Investors can react instantly to geopolitical shifts or economic data from any time zone. However, challenges are significant: persistent liquidity and volatility concerns during overnight sessions, substantial operational strain and costs for market participants, and the need for clear regulatory alignment on issues like best execution and investor protection. The impact on retail traders, particularly the increased "gap risk" for those in 0-days-to-expiration (0DTE) options, also remains a concern, as the proposal currently applies only to stocks and ETPs.
Potential scenarios and outcomes range from full implementation, leading to a new era of globalized equity trading with gradually improving liquidity in night sessions, to conditional approval or delayed rollout due to infrastructure hurdles or regulatory concerns. There's also the possibility of a fragmented market landscape if significant overnight trading remains on less transparent venues, or limited adoption in night sessions if institutional participation remains low. Ultimately, the success of Nasdaq's 23-hour trading proposal hinges on a delicate balance between expanding access and maintaining market integrity, requiring continuous adaptation and ongoing regulatory oversight.
Wrap-Up: A New Dawn for Global Equities
Nasdaq's proposal for 23-hour weekday trading represents a monumental step towards a truly globalized and continuously operating U.S. equity market. This "5x23" model, if approved and successfully implemented by its target in the second half of 2026, promises to fundamentally reshape how investors worldwide interact with U.S.-listed stocks and exchange-traded products.
Key takeaways from this event are the clear demand from international investors for flexible access to U.S. equities, the competitive pressure from other exchanges and 24/7 markets like crypto, and the sheer scale of the operational and regulatory coordination required. Nasdaq (NASDAQ: NDAQ) is positioning itself at the forefront of this evolution, aiming to enhance liquidity, accelerate price discovery, and solidify the U.S. market's global dominance. The transition will necessitate significant technological and operational investments from all market participants, from large institutional banks to individual brokers.
Assessing the market moving forward, we can expect a more dynamic and responsive environment. Investors will gain the ability to react in real-time to global events, potentially reducing the impact of overnight gaps that currently create significant price dislocations. However, the initial phases are likely to see lower liquidity and higher volatility during the extended night sessions, posing challenges for risk management and trade execution. The success of these new sessions will largely depend on the willingness of institutional investors to engage actively, which will be crucial for building sufficient liquidity.
The final thoughts on its significance and lasting impact are that this proposal signifies a "paradigm shift" for global capital markets. It is an embrace of a continuous trading ethos that has long been present in other asset classes and alternative trading systems. If successful, its lasting impact will be a broader reach and availability of the U.S. equity market, a re-engineering of portfolio strategies for asset managers, and a more harmonized global trading environment where time zones become less of a barrier to participation. For countries like India, it could lead to more continuous price discovery in local markets and increased intraday volatility in globally sensitive sectors and currencies.
What investors should watch for in coming months includes several critical developments:
- SEC Approval: The formal decision from the U.S. Securities and Exchange Commission is the immediate and most crucial hurdle.
- Infrastructure Readiness: Monitor the progress of the Securities Information Processor (SIP) in extending its data feeds and the Depository Trust & Clearing Corp. (DTCC) in rolling out its 24-hour clearing services. These are non-negotiable for the proposal's success.
- Liquidity and Volatility: Once (if) implemented, observe trading volumes, bid-ask spreads, and price volatility during the extended night sessions to gauge market efficiency and risk.
- Institutional Participation: Assess the extent to which major institutional investors engage in overnight trading, as their involvement will determine the depth and stability of the extended market.
- Competitive Responses: Keep an eye on further announcements and actions from other major exchanges like the New York Stock Exchange (NYSE: ICE) and Cboe Global Markets (CBOE: CBOE), as the competitive landscape will continue to evolve.
- Options Trading: Investors in options should specifically watch for any separate proposals or discussions regarding extended hours for options contracts, as the current Nasdaq proposal does not directly affect them.
The Nasdaq 23-hour trading proposal is a bold vision for a more interconnected global financial market. Its successful navigation through regulatory and operational complexities will mark a new chapter in the history of equity trading, demanding vigilance and adaptability from all market participants.
This content is intended for informational purposes only and is not financial advice