Opinion

Beyond the clock: Six things capital markets must consider as 24/5 trading advances

As US equity markets move toward near-continuous 24/5 trading driven by global demand and technology, Val Wotton, managing director and global head of equities solutions at the Depository Trust & Clearing Corporation (DTCC) highlights that the industry must modernise infrastructure, risk management, and coordination to handle increased complexity, liquidity challenges, and systemic risks.
By Val Wotton

The US equity market is approaching a fundamental shift as trading hours expand toward a near-continuous, 24/5 model. This month marks a major milestone with only three months to go before DTCC’s National Securities Clearing Corporation (NSCC) 24/5 hours go-live.

Driven by global investor demand, advances in technology, and the growth of digital asset markets, US exchanges and market infrastructures are preparing to support trading from 8pm ET Sunday through 8pm ET Friday, with only brief nightly technical pauses. This evolution promises broader global access and deeper participation.

While the benefits of extended trading are clear, operating in a 24/5 environment significantly increases complexity and risk. Without deliberate coordination across the market ecosystem, the potential for accumulating exposures, missed deadlines, liquidity shortfalls, and operational breakdowns rises materially.

As highlighted in DTCC and Ernst & Young’s research paper, ‘The shift to 24/5 trading: What it means for US equity markets’: “Resiliency, systemic, market, counterparty, and operational risks all expand, as volatility in one region can trigger contagion effects across geographies and amplify system stress.”

Overnight sessions typically feature lower liquidity, which can widen bid-ask spreads, increase price volatility, and elevate the likelihood of margin calls and funding challenges. DTCC–EY survey findings suggested that up to 10% of US equity trading volume could migrate to overnight hours by 2028. In this environment, static end-of-day risk models are no longer sufficient. Dynamic, intraday margining and near real-time exposure monitoring become essential to managing risk effectively.

How markets must adapt

Successfully navigating the transition to 24/5 trading requires coordinated modernisation across market structure, technology, operations, and regulation.

Recalibrating market safeguards

Market safeguards, such as circuit breakers, volatility controls, and trading halts, were designed for a traditional trading day. As activity extends overnight, these mechanisms must be recalibrated to remain effective in lower-liquidity conditions and across global time zones. Harmonisation across exchanges, alternative trading systems, and related products will be critical to maintaining orderly markets.

Technology infrastructure and operational readiness

A 24/5 market demands infrastructure capable of operating nearly around the clock, leaving little room for manual intervention or extended maintenance windows. Clearing, settlement, and risk systems must support continuous or near-continuous processing.

Post-trade infrastructure is already preparing. DTCC’s NSCC is on track to expand to 24/5 equities clearing in June 2026. Once implemented, NSCC will be able to apply its central counterparty guarantee to overnight trading across time zones.

Industry-wide testing is equally critical. DTCC opened its industry testing environment in January, enabling firms to validate connectivity, messaging, and workflows well in advance of extended production hours. Early testing allows participants to identify gaps, refine processes, and build confidence operating in a near-continuous market.

Data management and surveillance

Extended trading hours heighten the importance of real-time data and surveillance. Securities information processors (SIPs) must disseminate consolidated quotes and trades throughout the expanded window, while surveillance systems must monitor volatility, detect manipulation, and support compliance across all sessions.

Equally important is enabling firms to gain insights into their own clearing, settlement and post-trade data. Innovative data portals that provide timely, unified access to clearing and settlement information enable faster exception management, stronger oversight, and better-informed decision-making in a 24/5 environment.

Workforce and operational support

Continuous markets require new workforce models. Firms must adopt rotating shifts, follow-the-sun coverage, and enhanced training for overnight risk and incident management. With fewer natural downtime windows, robust escalation procedures, business continuity planning, and recovery capabilities are essential to operational resilience.

Corporate actions and lifecycle events

Extended trading introduces new complexity in managing corporate actions and other lifecycle events. Voluntary actions may now receive instructions overnight, increasing the need for automation and standardised processing timelines. Greater global alignment around cut-offs will help reduce risk and investor confusion.

Regulatory and industry coordination

Transitioning to 24/5 trading requires close collaboration among exchanges, clearinghouses, regulators, and industry groups. Rules and supervisory frameworks must evolve in tandem, supported by phased rollouts, pilot programs, and industry testing.

Looking beyond the clock

As markets move beyond the clock, success will depend not simply on longer trading hours, but on coordinated, industry-wide transformation of post-trade infrastructure, risk management, data, and operating models. DTCC’s expansion of clearing hours, early industry testing, and continued collaboration underscore the critical role of resilient market infrastructure in enabling this evolution.

The journey to 24/5 trading is already underway. Those who engage early by testing, modernising operations, and strengthening data quality will help define the next era of global capital markets.

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