The Overnight Gap: Why Exchanges Are Only Part of the 24-Hour Trading Equation

By Jason Wallach, CEO, Bruce Markets

Expected 23/5 exchange models still leave a daily 8:00 p.m. ET pause at the start of the overnight session. For brokers, that is why practical 24/5 coverage requires more than exchange access alone.

Overnight exchange trading is coming. But longer exchange hours are not the same as full market coverage.

That distinction matters as the U.S. equities market moves toward a more continuous trading model. Nasdaq, NYSE Arca and 24X have all advanced plans for extended or overnight exchange trading. DTCC’s NSCC has now extended clearing hours to a 24x5 model, a major milestone for the industry and a necessary step toward broader participation in overnight U.S. equities.

These developments are positive. More venues, more competition and more redundancy should help strengthen the overnight market over time. Exchange participation will bring additional legitimacy and liquidity to a part of the trading day that is becoming harder to treat as peripheral.

But for brokers, the question is not simply whether an exchange is open overnight. The question is whether they can deliver reliable customer coverage across the full overnight window. That requires more than one venue connection, one data source or one market structure model.

Why the Missing Hour Matters

The current exchange plans make this clear. With NSCC now supporting 24x5 clearing, one major post-trade hurdle has been addressed. The SIPs are also working toward extended operating hours, targeting a December 2026 launch pending SEC review and approval. But the proposed SIP framework is not a continuous 24-hour model. It contemplates operating hours as close as technically feasible to 24 hours per day, with a daily one-hour technical pause beginning at 8:00 p.m. ET.

In other words: because exchange trading depends on the broader public-market infrastructure around it, including SIP-supported market data, exchange offerings are expected to follow a 23/5 model rather than full 24-hour coverage.

That hour is not a technical footnote. Based on Bruce ATS trading data, the first hour of the overnight session is often one of the most active windows of the night. That makes sense. It is the point when U.S. after-hours trading has ended, Asian markets are in their local trading day and global retail investors are looking to respond to U.S. news, earnings, market moves and sentiment in real time.

For brokers already offering an eight-hour overnight session, a 23/5 exchange model could represent a step backward if used as the only source of coverage. For brokers still evaluating overnight trading, it underscores a broader point: exchange access alone does not equal 24/5 readiness.

This is not just about the SIPs. The SIP issue is the current example of a larger market-structure reality. Full overnight coverage depends on the interaction of execution access, market data, routing, liquidity, clearing, economics and customer experience. If one part of that stack is unavailable, limited or not aligned with customer demand, brokers need alternatives.

24-Hour Coverage Takes More Than One Model

That is why ATSs remain a crucial part of the overnight trading model.

ATSs are not trying to replace exchanges or the regular trading day. They fill the overnight gap between after-hours and pre-market trading, helping brokers assemble a practical 24/5 experience across venues and sessions. In that sense, “24/5” is not a single-venue product. It is a broker experience built from multiple components: where liquidity is available, where data is available, where orders can be routed and how reliably the customer can access the market.

Market data is an important part of that equation. If exchange and SIP support is limited to certain hours, brokers relying on SIP data alone will face limits in the visibility they can provide to customers. Lit ATSs with comprehensive data feeds can help address that gap. That point is important: today’s overnight ATSs are not dark pools. In some ways, their role is closer to the ECNs that helped reshape electronic trading in the late 1990s and early 2000s – transparent, technology-driven venues responding to a market need before the rest of the structure fully adapts.

Redundancy matters too. Brokers already understand the value of connecting to multiple venues during the regular trading day. The same logic applies overnight. No rule guarantees that an exchange will provide better execution quality than an ATS simply because it is an exchange. Brokers still need to evaluate liquidity, price, fees, fill rates, resiliency and the best interests of their customers.

That is especially true in a market where off-exchange trading is already a major part of U.S. equities, topping 50% market share in 2025. ATSs and other off-exchange venues are not an exception to modern market structure; they are part of how the market functions every day. Overnight trading is likely to develop the same way: not as an exchange-only environment, but as a competitive ecosystem where brokers route based on coverage, liquidity and execution quality.

What Happens Next

The need for flexibility may only increase. Retail brokers are moving toward fractional and notional trading models. Tokenized equities could eventually push market expectations beyond 24/5 toward something closer to 24/7. As customer demand evolves, brokers will need venue models that can adapt quickly, especially when the exchange, SIP and clearing infrastructure moves on a different timeline.

None of this diminishes the importance of exchange participation. The entrance of exchanges into overnight trading is a good sign for the market. It should improve competition, encourage investment in infrastructure and help normalize broader access to U.S. equities.

But exchange entry should be understood as part of the solution, not the whole solution. The next phase of overnight trading will be shaped by how well brokers combine exchanges, ATSs, market data, routing infrastructure and clearing support into a reliable customer-facing product.

The goal is not exchange versus ATS. It is coverage, redundancy and choice. In a market moving toward 24-hour access, brokers should not have to hitch their overnight strategy to one wagon – especially when viable alternatives already exist.