The startup 24 Exchange (24X) has been granted approval to host an overnight securities exchange that will operate 23 hours a day (8pm-7pm), five days a week, excluding holidays. The one hour of downtime will account for maintenance and functionality testing.

This marks the first time the SEC has given the go-ahead for overnight trading on a national securities exchange. As with traditional markets, the overnight trades will be “lit,” meaning buy and sell orders will be publicly visible.

24X initially hoped that the SEC would approve a full 24/7/365 market. The company’s original proposal had outlined that plan, but that was scaled back after receiving agency scrutiny.  

The nascent platform is set to begin hosting overnight securities trades in the second half of 2025, after it is integrated with public data feeds that track US stock prices.

24X will then be set to put traditional securities on the same trading timeframe as cryptocurrency, Treasuries and currency markets, which have traded after hours on weekdays since the advent of electronic trading.  

“Traders are most at-risk when the market is closed in their geographic location. 24X National Exchange will seek to alleviate this problem by facilitating around-the-clock US equities trading for broker-dealers and their institutional and retail customers,” said 24X CEO Dmitri Galinov in a press release.

Changing times

24X’s approval comes a few weeks after the New York Stock Exchange filed its own application to lengthen its Arca Equities Exchange’s weekday trading to 22 hours.

Much of the enthusiasm for around-the clock trading comes from younger investors involved in the crypto space. Popular trading platform Robinhood already allows “unlit” 24-hour trading in which orders are executed between platform users in so-called “dark pools” where prices are not disclosed.

Questions and concerns

Not all the receptions of the SEC’s approval have been positive. A central criticism relates to the possibility that the 23-hour market might create environments of higher volatility and lower liquidity during overnight trades, leading to larger spreads and generally poorer outcomes for inexperienced night owl investors. As part of its rules, 24X will disclose these risks to prospective investors.

SEC Commissioners Hester Peirce and Caroline Crenshaw dismissed that criticism in a public statement, stressing that the 24X’s overnight exchange had the potential to make trading more convenient for US and international investors, and bring more people into the securities markets.

The Securities Industry and Financial Markets Association (SIFMA) said it would be reviewing the implications of the SEC’s approval. In an October 29 letter to the SEC, the industry advocacy group highlighted that “clearance and settlement risks associated with the 24X Application have not been fully explored, and based on what we have gleaned so far, could potentially lead to systemic risks in the market that need further consideration.”

Another potentially overlooked risk factor – traders simply tend to engage in riskier behaviors at night, according to Better Markets.