US stocks are going to trade overnight! Starting in December, they will enter a 23-hour trading era.

Starting December 6, the four major exchanges, including Nasdaq and NYSE Arca, will officially add night trading sessions, marking Wall Street's full entry into the era of 23-hour "all-night trading".

This historic expansion aims to address cross-industry competition from cryptocurrencies and prediction markets offering "24/7 trading," and to accelerate the capture of incremental demand from overseas investors. Data from the U.S. Securities and Exchange Commission (SEC) shows that although night trading currently accounts for only about 1% of total U.S. stock trading volume, its year-on-year growth rate has reached a staggering 358%, demonstrating extremely strong growth potential.

Institutional funds are on the sidelines: liquidity and spreads are the core concerns.

The extension of trading hours has sparked debate in global markets. Supporters hope it will break down time zone barriers, but institutional investors with substantial funds remain highly wary of the potential risks.

David Easthope, senior analyst at Crisil Coalition Greenwich, points out that the core pain point for institutions lies in the "market quality" after extended trading hours—namely, liquidity and bid-ask spreads—rather than simply operational or staff scheduling issues. A survey of buy-side traders conducted by the firm in the second half of last year (second half of 2025) revealed that due to the scarcity of participants outside of regular trading hours, forced entry could face a double whammy of liquidity depletion and widening spreads, even impacting traders' mental and physical health. However, Easthope adds that with regulators substantially advancing reforms, buy-side traders are already psychologically prepared for the "inevitability" of this trend.

Joseph Saluzzi, co-head of equity trading at Themis Trading, stated bluntly that he lacked interest in the new regulations. He pointed out that currently, the combined pre-market and after-hours trading volumes on exchanges account for only 10% of the total, and institutional funds would never rashly enter a market with low liquidity, wide spreads, and extreme volatility.

Jeff O'Connor, head of market structure at Liquidnet, believes that institutions are currently in a "wait-and-see" mode. If the December expansion can substantially improve the nighttime price discovery mechanism and reduce transaction costs, institutional funds will eventually enter the market to capture nighttime alpha (excess returns).

Overseas and retail investors dominate: High concentration of trading targets

Overseas funds and retail investors have become the dominant force in the current night trading session. SEC data shows that in the second quarter of this year, overseas investors contributed 37% of the total trading volume in the night session.

The imbalance in the participant structure directly leads to a high concentration of trading targets. In August of this year, just 15 stocks accounted for 50% of the trading volume in the night session, with frequent appearances of low-priced stocks ("less than one dollar") registered in mainland China and Hong Kong. In contrast, during regular trading hours with ample liquidity, 256 stocks would be needed to achieve the same trading volume ratio.

Brian Hyndman, CEO of Blue Ocean Technologies, an alternative trading system (ATS) that currently provides night trading matching services, stated that existing active players will seamlessly transition after the new regulations take effect in December. However, he also acknowledged that the continued absence of buy-side institutions and investment banks means the market is still missing a crucial piece of the puzzle.

Infrastructure preparation in place: Only one-hour "window period" allowed each day.

Despite disagreements on the funding front, Wall Street's underlying infrastructure is prepared for an all-night operation.

The Depository & Clearing Corporation (DTCC), responsible for clearing US stocks, switched to a "24x5" mode in June of this year, operating from 8 p.m. Sunday to 8 p.m. Friday New York time. Meanwhile, Securities Information Processors (SIPs), responsible for distributing quotes and trading data, have also been approved to extend their operating hours.

According to the latest schedule, after the expansion in December, Nasdaq and NYSE will add an evening session from 9 p.m. to 4 a.m. the following day, in addition to their existing regular trading hours (9:30 a.m. to 4 p.m. Eastern Time), pre-market (starting at 4:00 a.m.), and after-market (4:00 p.m. to 8:00 p.m.) sessions.

From now on, the US stock market will only have a one-hour break from 8 p.m. to 9 p.m. for system maintenance and transaction processing.

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