Charles Schwab Corp., a leading U.S. financial broker, has announced plans to broaden its 24-hour trading platform to include all stocks listed in major U.S. indexes, along with hundreds of Exchange Traded Funds (ETFs), starting in approximately two weeks.
The decision follows growing requests from retail investors seeking more flexible trading hours. The brokerage company intends to implement the expanded trading feature gradually, beginning with its most active traders, with the rollout set to commence the week following the U.S. presidential election on Nov. 5.
“About 90% of the customers we surveyed in our newest Traders Sentiment Survey said they would be interested in participating in 24-hour trading,” said James Kostulias, head of trading services at Schwab.
The decision to extend trading hours is likely tied to the evolving demographics of Schwab’s client base. In the first half of 2024, almost 60% of the new households that became Schwab’s clients are headed by those who are under 40 years old. “They seem particularly likely to have an expectation that they will be able to trade any time, anywhere,” Kostulias said.
Interactive Brokers, which introduced its overnight trading platform in 2022 and offers access to 10,000 different products, has seen a 500% rise in trading volume during those hours. Another major financial company, Robinhood Markets Inc., expanded its trading hours in May 2023.
Several other brokerages are expected to offer similar trading services in the coming days. For instance, 24Exchange, a Bermuda-based platform backed in part by hedge fund manager Steve Cohen, is also seeking regulatory approval to offer 24/7 trading in U.S. stocks.
Overnight trading lets traders make buy and sell orders between 8 p.m. and 4 a.m. Eastern Time. It’s the time between the U.S. stock market closing time and when the pre-market trading begins the next morning. It allows international investors to trade during regular hours and gives U.S. investors a chance to respond if there is breaking news after the market has closed.
Overnight trading is mainly used by retailers and makes up only a small part of overall trading activity, but it has been gaining popularity recently.
The expanded trading capabilities will be powered by the platform operated by Blue Ocean Technologies LLC, which also supports Robinhood Markets and 19 other U.S. broker-dealers. The platform had suffered a crash in August this year during a global market sell-off.
Last Friday, the New York Stock Exchange, a part of the Intercontinental Exchange, announced its plan to extend its trading hours to 22 hours every business day.
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