Lack of liquidity may make round-the-clock trading more expensive.
The heads of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) say it’s a “new day” for the two organizations. The regulators want to work together to ensure harmonized oversight and promote innovation in the field of digital assets. This collaboration is part of a wider push to develop U.S. cryptocurrency markets and digital assets.
On Sept. 5, SEC Chair Paul Atkins and CFTC Acting Chairman Caroline Pham announced a series of new joint priorities. These include relaxing derivatives rules, exploring exemptions so that decentralized finance (DeFi) projects can grow, and expanding equity trading hours — potentially as far as 24/7 trading.
Cryptocurrency and forex investors are no strangers to round-the-clock trading. Even for equities, trading outside the regular hours of 9:30 a.m. to 4 p.m. ET is not new.
Several brokerages, including Robinhood (NASDAQ: HOOD), Interactive Brokers (NASDAQ: IBKR), and Charles Schwab (NYSE: SCHW), already offer some form of after-hours trading. Last November, the SEC greenlighted plans from the 24X National Exchange to offer 23-hour trading days.
Nasdaq and NYSE are both working toward longer trading hours. Last year, Intercontinental Exchange (NYSE: ICE), the company behind the NYSE, said that it wanted to extend U.S. trading to 22 hours a day, five days a week. Nasdaq plans to introduce 24-hour trading five days a week before the end of this year.
To some extent, proposals to extend trading hours run in parallel with moves to tokenize stocks and allow registered brokerages to offer spot crypto trading. Tokenized stocks are essentially blockchain-based tokens that represent shares in a company — and like cryptocurrency, they can be traded at any time. The lines between what crypto exchanges and brokerages offer are becoming increasingly blurred.
For retail investors, one big benefit of longer trading hours is that markets become more agile and accessible. It opens the way to react to news in the here and now, rather than waiting for the market bell. That may or may not be a good thing, given that panic investment decisions rarely pay off.
All the same, the current system does not favor people who want to manage their investments outside the regular working day. International investors may also appreciate extended hours. The World Economic Forum says that about 18% of U.S. equities are owned by people abroad, and a shift in trading times could boost this figure.
But it brings disadvantages, too. For investors, out-of-hours trading can mean:
Right now, brokerages use alternative trading systems (ATS) to offer non-traditional trading hours. Some of this takes place via “dark pools” — so named because trades don’t become public until after they’ve executed. They may sound sinister, but they’re registered with the SEC. They were designed to allow institutional investors to make large trades without moving the markets.
If the regulators’ plans pan out, out-of-hours trading would take place on regulator-approved exchanges rather than in dark pools. This could take some of the risks out of extended trading. As two SEC commissioners pointed out in a statement last year, using lit exchanges — the opposite of dark pools — could mean increased investor protection and increased liquidity.
Nonetheless, there’s still a lot of work to do behind the scenes to make extended trading a reality. In addition to practical questions of how to staff always-on exchanges, there are also technical and operational issues. Right now, financial institutions use the downtime to process certain trades, upgrade infrastructure, and more. Transitioning to something new won’t be as simple as ringing a bell.
Change is afoot in financial exchanges and regulation. It’s a good time for investors to consider their investment strategies and identify assets that may benefit from regulatory developments.
In terms of the how, that means staying informed, maintaining a diversified portfolio, and considering strategies to handle round-the-clock markets. Investigate the credentials of any brokerage you use, and make sure you understand the risks. If you’re a long-term investor, solid research and a firm hold on your investment strategy can help avoid middle-of-the-night trades.
As for potential investment opportunities, here are some areas to have on your radar:
2025 has already seen significant changes in financial regulation, and there are more to come. Informed investors will be best-positioned to benefit as we move into a new era of finance.
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Charles Schwab is an advertising partner of Motley Fool Money. Emma Newbery has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum, Interactive Brokers Group, and Solana. The Motley Fool recommends Charles Schwab and Intercontinental Exchange and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short January 2027 $46.25 calls on Interactive Brokers Group, and short September 2025 $92.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
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