Exchanges Prepare to Enter 23/5 Market, Spurring Competition with ATSs

The era of always-on markets in US equities trading is rapidly approaching as major exchanges are preparing to launch 23-hour, five-day-a-week trading on Dec. 6, supported by upgrades in market infrastructure and the consolidated market data feed.

Speaking at the 93^rd Annual STA National Market Structure Conference in October, industry executives said overnight trading, which has been available from alternative trading systems (ATS), could get a boost in volume and liquidity from major exchanges extending their trading hours.

On Dec. 6, five major exchanges – NYSE Arca, Nasdaq, CBOE EDGX, MEMX and 24X National Exchange – plan to add a trading session running from 9:00 pm to 4:00 am ET, entering an ecosystem built by ATS operators. Instead of replacing them, exchanges will interact with four ATSs– Blue Ocean, Bruce, MOON, and Interactive Brokers (Eos), running from Sunday to Friday, 8:00 pm to 4:00 am ET.

Yet overnight trading remains only a small segment or about 1 percent of total U.S. equity share volume, though activity surged 359% year-over-year to 144.6 million shares through August, across four ATSs, according to SEC analysis prepared for the 24-hour roundtable.

Supporters of the expansion said it’s meant to capture demand from international investors for U.S. stocks and ETFs in other time zones. Critics noted that institutional investors have concerns about thinner volumes, wider spreads, and execution quality overnight.

“Building exchange guard rails is going to give investor confidence,” said an executive with one of the U.S. exchanges that’s preparing for 23/5 trading. “It’s about meeting investors where they are, and we are a global business,” said the executive.

Eyeing the shift, panelists discussed the market infrastructure upgrades in clearing, corporate actions and access to public data that regulated exchanges need for extended hours. Exchanges and ATSs have also adopted standard rules around limit up/limit down with 20% price bands and trading halts.

Speaking at the SIFMA Annual Meeting on Oct. 20, Jamie Selway, SEC Director of the Division of Trading and Markets, commented: “What is new here is exchanges offering 23/5 trading and there being public market data and clearing. Until now three or four ATSs operated formally but without making a public contribution to market data,” said Selway. He noted that the Depository Trust & Clearing Corp. went live with a 24×5 model for clearing, running from 8:00 pm Sunday night in New York to 8:00 pm ET on Friday.

Public Market Data

A key breakthrough for regulated exchanges is the availability of the public market data feed operated by the securities information processors (SIPs) to operate.

Starting on Dec. 6, the two SIPs will support extended trading hours from 9:00 p.m. ET Sunday through 8:00 p.m. ET Friday, factoring in a planned one-hour technical maintenance window each evening between 8:00 p.m. and 9:00 p.m. ET.

“I think Dec. 6 is going to be a very significant day, and the reason is because of the SIP,” said Dmitri Galinov, founder and CEO of 24 Exchange, speaking at the STA conference. Under the current rule set, exchanges cannot match trades outside of the SIP hours, he explained. Expanding the SIP’s 16-hour day to 23/5 clears the way for exchanges to launch overnight trading, he said.

Galinov emphasized the SIP has five million subscribers and 400,000 firms consuming the feed. “When these prices are distributed over this massive network across all different firms and all different monitors, it’s going to be a different ball game,” he said.

Exchanges to Interact with ATSs

The overnight market started in 2021 with a single ATS, Blue Ocean submitting trades in batch at 4 a.m. Two more ATSs – MOON ATS and Bruce ATS – launched in 2024 and 2025 respectively, bringing competition and redundancy across three venues.

“Market participants recognized there was a growing demand for overnight trading and that it was time for bringing all that we hold dear about the core session – market integrity, investor protection, resiliency – to the overnight session,” said Jason Wallach, CEO of Bruce Markets, the SEC-registered broker-dealer that operates Bruce ATS.

Wallach cited the introduction of the immediate or cancel (IOC) order types in September 20025, the start of smart order routing of customer flow by broker dealers, and the beginning of internationalization by market makers as signs of a maturing market.

In June 2026, the overnight market saw a high volume of 250 million shares across 3 ATSs. “We see $9 billion notional. The market continues to grow, [and] it continues to mature with more participants,” said Wallach.

Demand Concentrated Among Retail investors

Even with the soaring volumes, demand for overnight trading comes from international retail investors in Asia Pacific who want to trade during their business hours.

On the STA panel, Matt Billings, vice president of brokerage and president of Robinhood Financial and Robinhood Securities, said the online broker’s 24/5 trading service launched in 2023, has expanded from forty securities and ETFs to approximately 1,400 securities.

“It gave them opportunities in real time as news is breaking,” said Billings. “It gives them flexibility, convenience, agency, and control,” he added.

Institutions Remain Skeptical

Despite the growth, STA panelists questioned whether overnight trading would attract institutions, suggesting the outcome is uncertain.

According to SEC data, foreign investors accounted for 37% of the overnight volume, while institutional accounts were 7% and individuals 9%.

“I don’t see institutions jumping in, but it’s an option,” said Galinov. “A big quant will want to trade at the market close in the core session. There is a closing price; it’s very liquid,” he said. That is unlikely to change. On the other hand, “people want this option,” said Galinov. “It’s embarrassing that you can buy an airline ticket in the middle of the night, but you can’t buy a stock.”

Prepping for 23/5 Trading

With the Dec. 6 deadline approaching, the focus for brokers and vendors is testing, operational readiness, CAT reporting impacts, risk controls, and supporting overnight trading sessions. “We’ve been participating in industry testing and preparing our systems to support clients for 24-hour trading,” said David Chu, Vice President, Project Management at FlexTrade.

But the move to 23/5 trading has other implications for trading platforms.

“The challenge is not just extending the market hours,” said Chu. “It’s trying to prevent operational risk, and the need for risk controls, client support, and staffing,” he said. Extended hours will require additional hiring, training, servers, and operational support on weekends. In addition, there are “market access rules” for trading securities on an exchange, algo broker dealer, or ATS, that have to be monitored, he said.

As momentum builds for around-the-clock trading, a key test is how exchanges, ATSs brokers, and market makers interact within the overnight ecosystem.

When exchanges pause from 8:00 pm ET to 9:00 pm ET — to allow for maintenance, testing and processing of dividends, and other corporate actions — ATSs will continue to match trades during the first hour of trading in Asia Pacific.

 “Even though there is that one-hour technical pause from 8:00 pm ET to 9:00 pm ET, clients can still trade through us and send order flow through Blue Ocean, or whichever ATS is available,” said Chu. FlexTrade already has connectivity to the major overnight trading venues.

Galinov said that exchanges can only match 23/5, which means that if 24 Exchange cannot match during the one-hour pause, it will route to the ATSs, he said.

Looking ahead, Brian Hyndman, CEO of Blue Ocean Technologies, said the extended hours session is moving from “the first inning to the second inning” with global exchanges entering. “We think it’s going to put some gasoline on the fire that’s been there for the past five years,” he said. “It doesn’t mean they will get all the volume,” he added, predicting that exchanges will co-exist with the ATSs.

To compete with exchanges on more level playing field, Hyndman said Blue Ocean is looking at displaying its best bid and offer on the SIP through a partnership with an exchange. Blue Ocean is now a fair access ATS and is working on becoming a Regulation Systems Compliance and Integrity (Reg SCI) entity.

Why wait for 24/7?

In late September, Robinhood announced plans to offer 24/7 trading through a partnership with Bruce ATS to extend trading to clients over the weekends and later over holidays. Billings said the firm will have a curated list of securities during this rollout process.

Commenting on the expansion to 24/7, Bruce Markets’ CEO Jason Wallach said: “We saw an opportunity to extend the Sunday night start-time and run one continuous session through the weekend.”  The new session could launch soon, subject to regulatory review and operational testing, said Wallach.

Meanwhile, institutional traders have told the sell side, if their portfolio manager wants to put in a name overnight, “then they will need to do that,” said the head of market structure for a bulge-bracket firm. “Over time, I do think it will be hard to ignore the overnight,” said the sell-side executive, adding: “As the market moves into a 24/7 model, the liquidity landscape could change.”

At the SIFMA Annual Meeting, Selway said the industry “could be at 24/7 trading sooner than we think.”