Nasdaq moves to near 24-hour trading. Some say that’s a bad idea

Nasdaq It is approaching 24-hour stock trading, a shift that some on Wall Street call unnecessary and potentially destabilizing.

The exchange said it plans to file paperwork with the Securities and Exchange Commission to allow U.S.-listed stocks and exchange-traded products to be traded approximately 24 hours a day, five days a week. If approved, the new program will begin in the second half of 2026.

Under the proposal, Nasdaq will expand trading hours to 23 hours each weekday from the current 16 hours. The shares will trade in a “daily session” from 4 a.m. to 8 p.m. Eastern time, followed by a one-hour pause for maintenance, testing and clearing. A “night session” would then take place from 9pm until 4am the next morning.

Critics argue that formalizing nearly seamless trading could worsen some of the problems that plague the structure of stock markets today – poor liquidity, sharp price swings and an increasingly “gamified” trading environment.

‘The worst thing in the world’

“This is literally the worst thing in the world,” the Wells Fargo trading desk wrote in a note to clients. “I can’t think of any single action that would gamify the stock market more than it already has. This is the epitome of making trading more like gambling.”

Jay Woods, chief market strategist at Freedom Capital Markets and a former market maker at the New York Stock Exchange, expressed concerns about the impact on publicly traded companies.

“The companies on the list need time to report and hold meetings where they don’t move the markets, and now we’re taking that away from them,” Woods said. “You’re opening a new can of worms.”

Nasdaq currently operates three weekday sessions: premarket trading from 4 a.m. to 9:30 a.m., a regular session from 9:30 a.m. to 4 p.m., and after-hours trading from 4 p.m. to 8 p.m.

Including retail-focused brokers robinhoodIt has already launched long-term or near-24-hour trading for select U.S. stocks and cryptocurrencies, responding to demand from retail investors who want the ability to trade on global news at any time.

New York Stock Exchange goes its own way extended working hours modelThere are 22-hour weekday trading plans that received initial SEC approval in February based on data feed updates.

Liquidity cluster

Wells Fargo added that most liquidity is already centered around the opening and closing of the market, making the idea of ​​extending trading hours even more inefficient.

“Most of the complaints I hear about market structure are about how bad the volume is, most of which come in during the open and close,” he said in the note. “And the industry’s move is to extend the trading day even further? That doesn’t make any sense.”

While Nasdaq has said it could attract more participation after long operating hours, skeptics ask whether firms will be forced to staff trading desks at all hours of the day.

“We know that between 9:30 and 4 a.m. most traders are at their desks. The largest institutions are working,” Woods said. “Are we going to have to add a whole new environment of traders and institutions manning the desks so they can participate 24 hours a day?”

Woods believes the pauses in trading serve a purpose, allowing markets to digest information and allowing participants to reset.

“We took a break for a reason,” Woods said. “Let’s recharge the batteries. Let’s all be on the same page. We’re already changing throughout the day. If things go too far, too fast, we take a break.”