Trading beyond the bell
Strategic and operational impacts of 24/5 trading
Why restrict global capital with limited trading hours? Extending SEC-approved hours could boost liquidity, reduce overnight risk, and offer more flexibility—but it could also introduce new challenges.
The future possibility of extended trading
Global investors want easier access to US markets, but traditional trading hours are still making that difficult. Unlike assets like foreign exchange and cryptocurrency, which trade nearly continuously, US equities are only now moving toward extended hours—recent SEC approvals allow for 23-hour trading on some venues. A proposal to extend Securities Information Processors (SIPs) operating hours would enable near-continuous trading, improving liquidity, reducing overnight risk, and enhancing flexibility. However, this shift also introduces new challenges in market structure, technology, and regulation, requiring coordinated efforts to address operational complexity, liquidity fragmentation, and investor protection.
What 24/5 trading could look like
Transitioning to around-the-clock trading requires major changes in technology, operations, and risk management, with AI-driven analytics and automation playing a critical role in managing complexity. What changes might investors expect if 24/5 trading becomes a reality?
What the resulting impact looks like
Implementing extended trading hours will impact various market participants in distinct ways:
- For asset owners and investors, there may be an expectation of 24/5 access from service providers, which could prompt a shift in brokerage standards.
- Buy-side organizations might encounter challenges with products traditionally executed at market close, as the concept of a “trading day” becomes less defined in a global, round-the-clock market.
- Market intermediaries, such as prime brokers and broker-dealers, may need to expand their service hours, enhance execution and lending capabilities, and adjust staffing and technology to accommodate increased trading volume and continuous client service.
- Market infrastructure providers, including exchanges and trading venues, must assess whether their systems can support extended hours and address the operational challenges of nonstop execution.
- Clearing agencies will also need to strengthen risk management and upgrade technology to monitor greater exposure.
- Finally, market governance bodies, such as self-regulatory organizations, will be required to update market rules—including those related to best execution, settlement cycles, clearing, and fiduciary responsibilities—to reflect the realities of extended trading.
Making the necessary infrastructure updates
Organizations moving to 24/5 trading must quickly address technology challenges, modernizing infrastructure for agile, dynamic market conditions. Integrating AI, data analytics, blockchain, and automation can boost productivity and manage volatility. Accelerating cloud adoption provides scalability and security, while organizations should also focus on regulatory assessments, robust data strategies, and resilient infrastructure.
Looking forward
Adapting to extended trading hours is essential for organizations seeking to remain competitive in today’s financial markets. Success depends on modernizing technology, automating operations, and strengthening risk management. Download the full report to learn how leading firms are evolving their strategies and infrastructure to better manage risks and capitalize on new opportunities.
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