Building the 24/7 Market Rails: A Deep Tech View on the Infrastructure Shift

The shift to extended trading hours is no longer a niche experiment. It is an inevitable infrastructure layer upgrade, driven by the exponential growth of global demand and the technological maturity of market systems. We are witnessing a classic S-curve adoption pattern: a slow initial phase giving way to a steep, accelerating uptake as the new paradigm becomes the baseline.

The data shows this adoption is already well underway. As of January 2025, extended hours trading accounted for over 11% of all U.S. equity trading, with more than 1.7 billion shares changing hands daily outside the traditional window. This volume has more than doubled since 2019, a clear signal that the old 6.5-hour day is no longer sufficient for a global market.

The primary driver is international investor demand. As finance professor Haoxiang Zhu notes, investors in Korea, Japan, or Europe want to trade U.S. markets during their local business hours. This pressure is forcing exchanges to adapt. Competition from fintech platforms that have offered overnight trading for years further accelerates the need for change. The result is a coordinated industry move that signals a new operational baseline. Major exchanges like the NYSE and Nasdaq are planning 22-23 hour sessions, with Nasdaq aiming for 24-hour trading on the Nasdaq Stock Market by the second half of 2026. This isn't just about adding hours; it's about building the fundamental rails for a 24/7 market.

The First Principles of Market Design: Why the Old Model is Obsolete

The traditional 9:30 a.m. to 4:00 p.m. trading day was a product of its time-a physical, regional market built for a pre-digital era. Today's global, electronic system operates on a different scale and speed, rendering that model a technological bottleneck. The core argument is straightforward: the old paradigm assumed a closed, local marketplace. The new reality is an open, 24/7 network where information and opportunity move at the speed of light. This fundamental shift in the operating environment makes the old clock obsolete.

The evidence of exponential growth in off-hours volume is the clearest proof. Extended hours trading has more than doubled since Q1 2019, now accounting for over 11% of all U.S. equity trading. This isn't a marginal trend; it's a structural shift in where and when liquidity is created. The growth has been explosive, with pre-market trading volume growing 15x since 2019 compared to just 2.3x for the post-market. This surge demonstrates that the old 6.5-hour day is no longer sufficient to meet demand. It is a bottleneck that is being actively bypassed.

This pressure is intensified by competitive forces from fintech venues that have offered overnight trading for years. As finance professor Campbell Harvey notes, several fintech companies have offered overnight trading for years. This creates a direct threat to traditional exchanges: they can cede market share to these agile competitors or adapt. The result is a coordinated industry move, with the NYSE planning 22-hour sessions and Nasdaq aiming for 23 hours a day. The pressure is coming from both sides-the demand of global investors and the innovation of new entrants. In this environment, the traditional model isn't just outdated; it's a vulnerability.

The Infrastructure Layer: What Needs to Be Built to Support the Paradigm

The shift to 24/7 trading is a paradigm shift in market design, but the real work lies beneath the surface. It's not just about extending the trading clock; it's about building a complete, hardened infrastructure layer that can operate continuously. The industry is moving forward, but significant technical and operational hurdles remain.

First, the clearing and settlement backbone must be upgraded. The Depository Trust and Clearing Corporation (DTCC) has acknowledged this need, announcing plans to support extended clearing hours of equities trades by mid-2026. This is a critical step, as the current settlement cycle is not built for overnight activity. Without this extension, trades executed in the extended hours would face a dangerous delay in finality, creating systemic risk and liquidity strain. The industry is aligning on a new operational model, with exchanges aiming for 23 hours a day, five days a week, but the settlement rails must keep pace.

A more immediate and tangible risk is corporate action fragmentation. This is the Achilles' heel of the extended hours model. As industry executives have noted, sometimes you have to look in three different places to find the corporate action. Distributions like dividends or stock splits may not be available or confirmed until late at night, while trading in those securities continues in the pre-market. This creates a dangerous mismatch where traders are making decisions on incomplete information. As one CEO put it, you've been trading it since eight. So this is something that really has to get fixed. This isn't a minor glitch; it's a fundamental vulnerability that could lead to costly errors and market instability if not resolved through a consolidated, real-time distribution system.

Finally, the cybersecurity and compliance layer must be hardened for constant operation. The attack surface expands dramatically when systems run 24/7. As one analysis notes, the securities industry's shift to digital platforms has exposed firms to a broader and more complex array of cyber threats. The old model of periodic maintenance windows is gone. Firms now need integrated risk management and real-time response capabilities, not just basic protections. The regulatory environment is also evolving, with initiatives like the "Financial Cybersecurity Action Plans" pushing for enhanced governance and system resilience. The infrastructure must be built to withstand persistent threats and ensure compliance at all hours.

The bottom line is that the 24/7 market is a new technological paradigm. It requires a complete overhaul of the supporting infrastructure-from clearing to corporate actions to cybersecurity. The industry is making progress, but the path forward is paved with these critical, often overlooked, systems that must be built to make the paradigm shift viable and secure.

The Investment Implications: Winners, Risks, and What to Watch

The shift to 24/5 trading is a foundational upgrade, and the investment winners will be those that build and operate the new infrastructure layer. This isn't about short-term volume spikes; it's about capturing the recurring fees and market share of a permanent, expanded market.

The primary winners are the exchanges and clearing houses that successfully execute this build-out. Nasdaq, with its explicit goal of 24-hour trading on the Nasdaq Stock Market by the second half of 2026, is positioning itself to capture new transaction volumes and fees. Its stated aim is to provide a world-class 24-hour trading experience, which implies a premium service tier. The Depository Trust and Clearing Corporation (DTCC) is also a critical beneficiary, with its National Securities Clearing Corporation planning to support extended clearing hours of equities trades by mid-2026. This alignment is essential; without it, the extended trading session would be a liquidity trap. Firms that own or control this new operational backbone-exchanges, clearing houses, and the data dissemination systems like SIPs-will see their network effects and fee structures expand.

A key competitive advantage will belong to firms with robust, AI-powered surveillance and compliance systems. The operational and regulatory risks multiply when systems run 24/7. The industry is already identifying the major vulnerabilities. One executive highlighted the critical issue of corporate actions, noting traders may be executing trades on securities while the official dividend or split details are still pending. This creates a systemic risk that demands a consolidated, real-time distribution system. Beyond that, the cybersecurity threat landscape broadens significantly. As one analysis notes, the industry's shift to digital platforms has exposed firms to a broader and more complex array of cyber threats. Firms that can deploy AI for real-time anomaly detection, integrated risk management, and automated compliance checks will not only mitigate these heightened risks but also gain a trust advantage. They will be the ones market participants choose to trade through, knowing their orders are protected around the clock.

The primary catalyst for this entire shift is regulatory approval. Nasdaq's timeline is contingent on regulatory approval and alignment with critical industry infrastructure providers. The SEC has already granted preliminary approval for 23-hour sessions, but the final green light is the key event to watch. The implementation date of the second half of 2026 is the target, but it hinges on the industry's ability to resolve the infrastructure gaps. The bottom line for investors is to monitor the progress on three fronts: the resolution of corporate action fragmentation, the completion of settlement system upgrades, and the final regulatory sign-off. The firms that navigate these hurdles will own the rails of the next market paradigm.