Preparing for the Shift to 24-Hour Trading

Preparing for the Shift to 24-Hour Trading

Is Your Public Company Ready?

The move toward 24-hour trading marks one of the most transformative changes in financial markets since electronic trading began. With major exchanges like NYSE, NASDAQ, and CBOE expanding their hours, and the SEC approving 23-hour operations for the 24X National Exchange, public companies must prepare for a new era of continuous market activity.

This shift will impact trading strategies, investor communications, and operational models. As global investor participation grows, companies must adapt to remain competitive and resilient.

Key Takeaways

• 24-hour trading will reshape corporate communications, trading behavior, and market operations.
• Public companies must adopt agile strategies to succeed in a continuous global trading environment.

The Evolving Trading Landscape

The foundation for round-the-clock trading is rapidly forming. Retail platforms like Robinhood and Schwab have already introduced extended hours, while NYSE, NASDAQ, and CBOE are planning near-continuous trading sessions. NYSE Arca will operate 22 hours daily, and NASDAQ aims to launch full 24-hour trading by late 2026.

To support this expansion, infrastructure upgrades are underway. The DTCC will extend clearing hours via its NSCC starting in Q2 2026, and SIPs are preparing to operate nearly continuously, pending SEC approval.

Implications for Public Companies

Investor Relations and Communications

Traditionally, companies release earnings and material news outside trading hours to manage market reactions. With 24-hour trading, this strategy becomes less effective. Companies will need to adjust release timing and ensure investor relations teams are available during extended hours to manage real-time responses.

Market Volatility and Liquidity

Extended trading hours often see lower liquidity and higher volatility. Public companies may experience more pronounced price swings outside regular hours, complicating market perception and investor sentiment.

Settlement and Operational Challenges

T+1 Settlement

The recent shift to T+1 settlement (effective May 28, 2024) adds pressure to overnight trading. Firms must complete trade affirmations by 9:00 PM ET on the trade date, leaving little room for error. This compressed timeline increases operational risk, especially during off-hours.

Global Integration and Competitive Forces

International Demand

Global interest in U.S. equities, particularly from Asia-Pacific markets, is driving demand for extended trading. Time zone arbitrage strategies are emerging, allowing traders to leverage trends across global markets.

Crypto Market Influence

Cryptocurrency’s 24/7 trading model has set new expectations. Retail investors now seek similar flexibility with stocks and ETFs, pushing traditional exchanges to evolve.

Looking Ahead: Market Structure and Strategy

The shift to 24-hour trading will redefine market structure. Traditional opening and closing bells may lose relevance, and trading sessions will span multiple calendar days, adding complexity to systems and reporting.

Strategic Considerations

To succeed, companies must:

• Enhance investor relations capabilities
• Implement robust risk management systems
• Adapt communication strategies for continuous market engagement

Research shows that over 40% of daily volatility occurs overnight, underscoring the importance of participating in extended trading. Limit orders, liquidity-focused strategies, and selective news engagement will be key.

Conclusion

24-hour trading is not just an operational change, it’s a strategic imperative. Public companies must prepare for increased complexity, heightened volatility, and evolving investor expectations. While the shift offers greater global access and efficiency, it also demands stronger safeguards, compliance, and infrastructure.

Success in this new environment will depend on a company’s ability to balance opportunity with risk, and to remain agile in a market that never sleeps.