Exploring the future of 24-hour trading: Insights from the STA 2025 Conference

Key Takeaways

• The momentum behind 24-hour trading is growing, with liquidity providers, retail investors, and institutions demanding continuous access.
• Operational and regulatory challenges remain, with hurdles including liquidity constraints, wider spreads, data distribution gaps, and legacy system limitations.
• Advancements like tokenization and extended options trading are expected as the infrastructure adapts.
• Firms across the buy-side, sell-side, and vendors must prepare for automation, new workflows, and global expansion.

At the recent Security Traders Association conference in Washington DC, a panel of industry leaders convened to discuss the evolving landscape of 24-hour trading. Panelists included representatives from both a major US exchange, and one of the new breed of Alternative Trading System (ATS) that have led the drive towards extended market hours.

Liquidity providers are becoming an increasingly important driver of innovation in the capital markets, and extended market hours are one of the most obvious ways in which venues are seeking to deliver an enhanced service. “24-hour” trading will directly impact market participants and also has implications for the wider landscape.

Market momentum and investor expectations

The discussion began by clarifying what “24-hour trading” entails. While some exchanges already operate for extended hours — up to 16 hours a day — the goal is to close the remaining gap and enable continuous, round-the-clock access. Panelists emphasized that this transition requires careful consideration of stakeholder needs, with surveys indicating that many issuers remain cautious about full adoption of full 24×7. All agreed that 24×7 is a desired end state. But, there are challenges to overcome and that multiple steps are likely between today’s extended hours and full 24×7.

The panel noted that the post-COVID era has accelerated demand for real-time services, including trading. Investors now expect seamless access to markets regardless of time zone. This shift has led to increased staffing across global desks and a rise in international flows, although US-based activity remains dominant. Notably, retail investors are driving much of the demand, seeking flexibility to trade on their own schedules. Cryptocurrency’s 24/7 model was identified as a key catalyst for the push toward continuous equities trading. The expectation of unrestricted access across asset classes is becoming normalized, setting a precedent that traditional markets are beginning to follow.

While overnight trading has been largely retail-driven in the US, the panel also emphasized that interest from institutional investors is growing. As liquidity becomes more available outside of traditional market hours, buy-side institutions are increasingly keen to participate. In response to the potential profit opportunities, sell-side firms are beginning to explore staffing solutions for off-hours trading. In contrast to the picture in the US, developments in other markets are less advanced. The panel concluded that, while international exchanges are open to the concept of extended hours, they have yet to see sufficient demand to justify implementation.

Operational and technical challenges in 24-hour trading

Despite growing interest in extended market hours, the panel identified several remaining hurdles to implementation. These include liquidity constraints, data distribution limitations, and the need for robust risk management. The absence of a Securities Information Processor (SIP) for overnight real-time market data. Additionally, legacy systems designed for 23-hour operations must adapt to accommodate true 24/7 functionality.

Ensuring investor protection is a top priority. Firms are initially limiting overnight trading to highly liquid securities to mitigate risk and build trust. Market quality remains a concern, with overnight spreads typically wider than during core hours. However, the presence of market makers quoting overnight is helping to tighten spreads and improve conditions.

Technological advancements and future implications

The panel highlighted tokenization as a likely second-order effect of 24/7 trading. As infrastructure evolves, tokenized assets may become more integrated within existing regulatory frameworks, enhancing speed, transparency, and control. Options trading was also identified as a natural next frontier, given recent volume surges and the potential benefits of extended hours.

Regulatory priorities appear to align with industry goals, with continued emphasis on reliability and investor protection. Looking ahead, firms plan to focus on equities and geographic expansion, while educating investors about the nuances of after-hour trading.

Key takeaways from STA conference 2025

The panel discussion highlights how momentum is building behind extended market hours in the US. Liquidity providers (both established exchanges and new players) are driving the trend, but it has implications for firms across the industry. Buy-sides are keen to take advantage of new sources of liquidity by participating in extended hours sessions. Sell-sides need to review their workflows and processes to take account of this new demand. And vendors need to ensure that they can deliver access to the full range of trading venues that facilitate extended sessions. One thing was absolutely clear from the discussion; the implications of extended market hours are wide-ranging and will impact right across the industry.