GREG BAKER

South Korea launches night trading as Nasdaq targets 23-hour sessions: is the global race to add trading hours enlarging the pie, or merely reshuffling it?

On September 14, the Korea Exchange (KRX) officially launched an after-hours night session. More than 2,600 KOSPI and KOSDAQ constituent stocks can now continue to trade through real-time matching between 4pm and 8pm, after regular trading ends at 3.30pm. Short selling is also allowed, although ETFs are not yet included. It is the first time South Korean equities have used real-time matching outside regular hours, replacing the previous single-price matching mechanism after the close.

This is not an isolated local experiment. Around the same time, Nasdaq approved a more aggressive plan: from December 6 this year, it will introduce trading five days a week for up to 23 hours a day, leaving only one hour from 8pm to 9pm for system maintenance and the processing of daily settlement. The New York Stock Exchange, CME Group and the London Stock Exchange have also been advancing plans to extend trading hours or launch around-the-clock contracts in recent months. Nasdaq is not acting alone.

Beneath the seemingly calm surface of the markets, a test of endurance over time and capital has quietly begun. As investors have become accustomed to the cryptocurrency market's round-the-clock price movements, traditional stock exchanges are being forced to show their hand.

From competing on matching to competing on stamina

For decades, the core competitive strengths of the world's major exchanges rested mainly on two factors: the quality of listed companies and the speed of trade execution. That competition directly drove the rollout of fibre-optic networks and successive advances in high-frequency trading technology.

But as the crypto-asset market has expanded, investors' trading habits have undergone a shift that is difficult to reverse. The 24/7 nature of cryptocurrency trading is effectively a one-sided assault on traditional capital markets. As younger investors grow used to buying and selling assets at any time, exchanges that continue to cling to nine-to-five hours risk voluntarily giving up part of their active liquidity.

KRX's decision to introduce night trading was not driven by sharp shifts in local economic data. Rather, it was a defensive response to pressure on its position within the wider market ecosystem. South Korea's alternative trading system, NXT (Nextrade), was established in March 2025 with funding from 34 securities firms, financial institutions and IT companies. It offers up to 12 hours of continuous trading, from 8am to 8pm, and at one point accounted for more than 30% of KRX turnover. Its rapid growth led NXT in September 2025 to hit financial regulators' limits — no more than 30% of KRX turnover in a single stock and no more than 15% across the entire market — forcing it to suspend trading in nearly 150 stocks temporarily. The regulatory ceiling was more than proof that market demand existed: it directly exposed the gap between market demand and KRX's existing trading hours, and was one of the key immediate reasons for KRX to add a night session.

A feast of liquidity — a bigger pie or merely a different split?

On the surface, longer trading hours appear to inject fresh activity into the market. But a closer look at capital flows suggests that the essence of this race to add hours is closer to reallocating existing liquidity than creating new wealth from nothing.

For large institutional investors, a night session makes cross-time-zone asset allocation smoother. Rebalancing that previously had to wait until the weekend can be spread across weekday evenings, reducing to some extent the risk of opening gaps triggered by sudden overnight news.

For retail investors, however, the additional four hours often come with higher friction costs. Trading volumes are naturally lower during night sessions and order books are thinner, making large individual trades more likely to cause unusual price swings. Retail investors without professional algorithmic support may also find themselves trading during tiring, non-standard hours and becoming easy prey for high-frequency market makers.

As a result, the winners in this battle to extend trading are not all market participants. The first to benefit remain the exchanges and brokers at the top of the industry chain, which can use longer trading windows to capture more transaction fees and revenue from value-added services.

The hidden bill: infrastructure and people

Supporting this globally synchronised trading network requires extremely expensive investment in system redundancy. For every additional hour of continuous trading, exchanges must keep extra server clusters, backup power and real-time risk-control systems running. Nasdaq's move to a 23-hour schedule is understood to involve a comprehensive upgrade of the settlement and clearing infrastructure.

At the same time, hidden staffing costs are rising rapidly. Market makers and brokers must reorganise global team rosters to ensure continuous pricing services even during off-peak hours. Such intensive shift work not only increases the operating costs of financial institutions, but also exposes employees to more severe burnout and health strain.

If the cryptocurrency frenzy represents uncontrolled, organic growth, the “ultra-long operating hours” being introduced by traditional exchanges are a carefully calculated counterattack with a clear commercial purpose. They seek to demonstrate that even in a highly digitalised age, a traditional model built on compliance, transparency and the backing of central clearing still has an irreplaceable moat.

Three measures for watching the future

As trading clocks continue to expand, investors should remain clear-headed and monitor the following indicators to judge whether this race to add hours is creating real opportunities or becoming a resource-draining exercise:

  • Night-session capital retention: Can the new night sessions continue to attract fresh capital, or are they merely an outlet for sentiment that would otherwise be expressed during regular trading? If a night session depends over the long term on one-way trades by a small number of large investors, with little turnover, that would indicate limited appeal to retail investors.
  • Market-maker bid-ask spreads: Watch whether spreads in leading technology stocks and popular securities widen sharply during low-volume late-night trading. If liquidity providers withdraw because they cannot cover staffing and system costs, the actual trading friction faced by retail investors will rise significantly.
  • Regulatory arbitrage and cross-border hedging volumes: Track changes in the correlation between US, European and Asian markets during overnight trading. If a night session merely mechanically mirrors US market data rather than reflecting domestic industry fundamentals, blindly following the trend during such hours could expose investors to unnecessary losses in market value at irrational moments.

There are no permanent kings in the capital markets, only survivors that continually adapt to the cycle. In this marathon of endurance, those who can find a balance between noisy market action and human fatigue will be the ones to command pricing power over the next decade.