For years, investors were confined to traditional Wall Street trading hours between 9:30 a.m. and 4 p.m. ET on weekdays and “extended hours” starting as early as 4 a.m. and ending at 8 p.m.
Now, brokerages seeking to meet the growing global appetite for U.S. stocks are extending their timetables.
Since Robinhood Markets and Interactive Brokers unveiled overnight trading in single stocks last year, other platforms have raced to expand their offerings. The New York Stock Exchange recently unveiled plans to extend trading on its all-electronic exchange to 22 hours a day. Charles Schwab plans to add individual stocks and hundreds of additional exchange-traded funds to its off-hours session. Webull recently expanded its 24-hour trading platform to include U.S. users, and Firstrade is launching overnight trading next year.
Investor appetite for stocks has been voracious in 2024. The S&P 500 has jumped 25%, driven by the artificial intelligence boom and expectations for interest-rate cuts. And investors have piled into funds tracking U.S. stocks since Donald Trump was elected president. Deutsche Bank said its measure of equity positioning posted its biggest weekly jump on record following the election, based on data going back to 2010.
Proponents of 24-hour trading say it gives investors more control over their portfolios and allows them to react faster to news outside regular trading hours. That, in turn, also lets investors manage their risk in real time, they say.
“If a door flies off a Boeing plane over the weekend, you don’t have to wait for the stock exchange to open up in the morning,” said Brian Hyndman, chief executive of Blue Ocean Technologies, the parent company of a platform that powers overnight trading for U.S. brokerages.
Late-night trading can expose traders to dangers, too. Thin volumes can leave markets vulnerable to sharp price swings, whereas huge volumes can lead to kinks in the platforms’ plumbing. Blue Ocean—which powers off-hours trading for Schwab and Webull, among others—saw an hourslong outage during the global markets rout in August. Blue Ocean says it has since upgraded to a new technology platform.
Most of the enthusiasm for 24-hour trading has come from amateur traders and those in Asia where market hours don’t overlap with those of the U.S.
Some institutional investors, on the other hand, have called for a shortened trading day because so much activity now takes place at the opening and closing bells.
Individual investors often take bigger, riskier bets than their institutional counterparts. Schwab and Webull are among brokerages that permit only “limit orders” for certain overnight trades, where investors set a maximum and minimum price at which to buy or sell. That is a strategy often recommended by advisers to ensure investors limit their risk if markets unexpectedly melt down.
For some traders, making supersize late-night bets has paid off. Long Hoang, a 30-year-old software engineer in the San Francisco Bay Area, raked in more than $1 million on a series of trades last month. He bought shares of Trump Media on Oct. 25, ahead of Trump’s interview with podcaster Joe Rogan and sold them when the stock popped during an overnight session days later.
On Wednesday, he bought shares of bitcoin holding company MicroStrategy at 10:15 p.m. PT, suspecting the market would rally following Nvidia’s strong earnings report. He sold his entire position a minute after Thursday’s open, pocketing a roughly $450,000 profit.
Overnight trading “has been kind of like a godsend,” said Hoang, who often stays up late to monitor trading opportunities around events such as speeches from China President Xi Jinping. “It’s felt like the power is in our hands now.”
Trading platforms say much of their off-hours activity is event-based. Blue Ocean facilitated a record $3.3 billion in trades in the off-hours session following Election Day. The trading platform typically sees about $1 billion in trades during an overnight session, according to Hyndman.
Some of Robinhood’s busiest overnight sessions have been around Federal Reserve policy meetings, key earnings reports and developments in the Israel-Hamas war. The off-hours session following Nvidia’s earnings report last week was Robinhood’s sixth-busiest on record.
Steve Quirk, Robinhood’s chief brokerage officer, said individual investors want the convenience of trading what they want, when they want. Although the pandemic-era trading boom has faded, robust online communities and the rise of remote work have allowed Americans to be plugged into the market like never before.
Plus, 24-hour trading in assets such as cryptocurrencies has raised investors’ expectations for when they can trade other assets, said James Kostulias, Schwab’s head of trading services.
Write to Krystal Hur at krystal.hur@wsj.com
