Who Benefits from Nasdaq's 23-Hour Trading?

Author: Wall Street Insights

The most active stocks during the Asian trading session are not tech stocks, but rather U.S. market ETFs.

On December 6, 2026, Nasdaq plans to launch stock trading for 23 hours a day, five days a week. The SEC has approved the changes to Nasdaq's 23/5 trading rules, but the official launch still depends on the readiness of market infrastructure like SIP and the implementation of supporting regulations.

The new night trading session will start at 9 PM Eastern Time and end at 4 AM the next day. In December, the U.S. will observe standard time, corresponding to 10 AM to 5 PM Beijing time. Asian investors can directly trade U.S. stocks during the day.

This reform seems to merely extend trading hours, but it is actually a battle for orders. Nasdaq aims to reclaim transactions from night trading platforms, broker internal trading systems, and other exchanges. It also wants global investors to complete trades in the U.S. market first after significant events occur in any time zone.

In the short term, Nasdaq is competing for orders from ATS night trading platforms, broker internal systems, and other exchanges; in the medium term, it is competing for price discovery of ETFs and large tech stocks at night; in the long term, it is competing for the global asset pricing gateway during Asian daytime.

Nasdaq's extension of trading hours is not to keep U.S. investors awake trading stocks. It aims to turn the daytime of Asian investors into trading hours for U.S. stocks.

Asian Daytime Becomes U.S. Night Trading

The core trading time for U.S. stocks is only 6.5 hours. Pre-market and after-hours trading already exist. Nasdaq's new arrangement fills the gap from 9 PM to 4 AM Eastern Time, leaving only 1 hour for maintenance.

Note: Nasdaq's 23-hour trading spans across different days in Beijing time.

This newly added time perfectly covers the daytime of major Asian markets. Investors from China, Japan, and South Korea no longer have to wait until late at night. After the Federal Reserve's policy changes, geopolitical conflicts, or corporate news, Asian funds also do not have to wait for the New York market to open.

What Are Investors Buying During Asian Hours?

Nasdaq has released a set of overnight trading data from the U.S. The statistical period is from January to June 2025. These trades mainly occur during the Asian trading session, and the data cannot identify the nationality of investors, nor can all transactions be labeled as Asian funds. It is more suitable for observing trading preferences and tool choices during the Asian session.

The U.S. market has about 11,300 trading codes. Only 1,403 had transactions overnight. Only 644 had a daily trading volume exceeding $10,000. The top 15 products accounted for about 53% of the total overnight trading volume, which Nasdaq summarizes as close to 55%. Among them, 12 are ETFs, and only 3 are individual stocks. This indicates that night trading is not a migration of liquidity across the entire market, but rather concentrated trading of a few macro risk tools and large-cap assets.

SPY, IVV, and VOO are all S&P 500 ETFs, collectively accounting for 25.6% of overnight trading. QQQ accounts for 4.5%. The triple-leveraged QQQ (TQQQ) and the triple-inverse QQQ (SQQQ) together account for 2.9%.

The three most active individual stocks are Tesla, Nvidia, and Alibaba, collectively accounting for 12.7%. Other active products include gold, Indian stocks, international stocks, and corporate bond ETFs.

Note: Data from January to June 2026.

Investors during the Asian session primarily trade in the U.S. market, and only then do they trade U.S. companies. The main focus of night trading is not company research, but risk management.

Nasdaq's Primary Competition is for Orders

SPY, IVV, VOO, and Alibaba are not listed on Nasdaq. They can still be traded on Nasdaq. This fact indicates that 23-hour trading is primarily about competing for trading orders, not for listed companies.

After U.S. exchanges close, orders do not disappear. They flow to overnight platforms like Blue Ocean, broker internal systems, and other trading venues. The New York Stock Exchange and Cboe are also pushing for longer trading hours. The London Stock Exchange is preparing to build a new delayed trading platform starting with ETFs. Supporters argue that bringing these orders back to regulated exchanges can improve transaction transparency, quote visibility, and market monitoring capabilities.

Exchange revenues come not only from transaction fees. Orders generate market data revenue, attract market makers, and form market reference prices. Whoever gets the orders first can incorporate information into prices sooner.

Longer trading hours will also enhance the attractiveness of the U.S. market for overseas companies. This effect ranks after the competition for orders. Companies choosing where to list still need to compare valuation, liquidity, investor structure, and regulatory costs.

Nasdaq first competes for orders, then for prices. Only after mastering prices can it attract more companies.

Who Pays for 23-Hour Trading?

Exchanges are extending not just the matching system. The entire financial infrastructure needs to operate longer.

Exchanges need to continuously provide market data and monitor trading. Brokers need to arrange customer service, compliance, and risk control. Market makers need to extend quotes and occupy more capital. Clearing agencies, banks, data providers, and technology service providers also need to work in sync. System maintenance time is compressed, and cybersecurity risks increase accordingly.

Existing pre-market and after-hours trading already bear some costs. The new night trading will still increase personnel, system, capital, and compliance expenses. The problem is that the overnight trading of most stocks is very light. Many institutions need to maintain a full set of services for a few ETFs and large tech stocks.

Ultimately, the costs will fall back on investors. This may not manifest as a night trading commission. The bid-ask spread may widen. Financing costs may increase. Brokers may restrict market orders and trading varieties. Market makers will also factor in capital occupation and hedging risks into their quotes.

Exchanges extend time, while investors bear the spread. Trading time is not a free public service; it is a financial product that requires transaction volume to pay costs.

Faster Prices Do Not Mean More Accurate Prices

23-hour trading increases market response speed. It does not automatically create liquidity.

Overnight participants are fewer, and market depth is insufficient. The trading times for stocks, futures, and options are not fully synchronized. After market makers sell stocks, they may not be able to immediately use other tools to complete hedging. Quotes will be more conservative, and spreads will be wider.

After significant news occurs, night trading will quickly form prices. These prices may reflect new information or may simply be the result of a few orders pushing the market. Once the main trading period begins, more institutions enter, and night trading prices often need to be re-evaluated.

Investors gain the freedom to trade at any time, but they also gain the freedom to make mistakes at any time. Night trading is more suitable for reducing sudden risks, not for chasing short-term prices. Limit orders are more important than market orders. Waiting for liquidity to recover can sometimes be cheaper than acting immediately.

23-hour trading solves the "Can I sell?" problem but does not solve the "At what price should I sell?" problem.

The U.S. Exports Not Just Capital, But Also Prices

ETFs dominate overnight trading, revealing a deeper change. Global investors can trade U.S. stocks in the U.S. market, as well as gold, Indian stocks, global bonds, and market risks from other countries. These assets may not belong to the U.S., but trading and pricing are increasingly concentrated in the U.S. After significant events occur, global funds first adjust their positions through U.S. ETFs. Before local markets open, the U.S. market has already formed reference prices.

This leaves a question for Asian markets. When Indian stocks are traded through U.S. ETFs, who determines the international price of Indian assets? When Chinese tech stocks are traded in both Hong Kong and the U.S., which market reflects global expectations first? After the Asian markets open, is it independent pricing or correcting the answers already given by the U.S. market?

The U.S. exports not just capital, but also prices.

Does the Hong Kong Stock Exchange Need to Copy Nasdaq?

The Hong Kong Stock Exchange has already studied extending trading hours. The cash market has discussed opening at 9 AM and eliminating the lunch break. The current focus is still on extending the night trading of derivatives. In the short term, the Hong Kong stock market is more suitable for limited delays and pilot varieties rather than directly copying 23-hour cash trading.

The Hong Kong Stock Connect is the biggest constraint. Southbound funds account for a significant proportion of Hong Kong stock trading. If the Hong Kong Stock Exchange opens night trading independently, mainland funds cannot participate simultaneously. Transactions may be split into two markets. The operational costs for financial institutions will certainly increase, but new orders are not guaranteed. A more realistic path is to first focus on the night trading of derivatives, ETFs, a few large dual-listed stocks, and the convenience of RMB trading and settlement.

Hong Kong's real advantage is not its operating hours. Hong Kong has a batch of Chinese internet, consumer, pharmaceutical, and artificial intelligence companies that global investors cannot access directly in other markets. The more important work for the Hong Kong Stock Exchange is to increase the supply of quality assets, expand connectivity, and improve RMB trading and settlement.

Nasdaq brings global orders to the U.S. market. The Hong Kong Stock Exchange brings Chinese assets to global investors. The two are competing for pricing power, but their paths are different.

Conclusion: It's Not About Who Keeps the Door Open Longer

23-hour trading superficially represents a change in trading systems. Behind it is the competition for global orders among trading platforms, financial intermediaries, and major capital markets.

Trading time is merely an amplifier. With global demand, extending time can increase transactions and expand pricing power. Without sufficient demand, extending time will only increase costs and disperse liquidity.

Without assets that global investors want to trade continuously, extending operating hours will only prolong the dullness. What exchanges are truly competing for is not who keeps the door open longer, but who defines the next global price.