tl;dr
The Cboe is pushing to extend options trading hours to align with global markets, introducing new sessions to give investors flexibility. The proposal, if approved, could reshape U.S. trading dynamics and mark a shift toward 24x5 market access.
**Cboe Seeks to Extend Options Trading Hours, Eyeing Global Market Alignment**
The Chicago Board Options Exchange (Cboe), one of the world’s largest derivatives marketplaces, has taken a bold step toward modernizing U.S. options trading by proposing extended hours to better align with global markets. On Monday, the exchange filed a regulatory proposal with the Securities and Exchange Commission (SEC) to expand its trading window for equity options, aiming to provide investors with greater flexibility to react to international market events and manage volatility outside traditional hours.
If approved, the Cboe would introduce two new trading sessions: a morning session from 7:30 a.m. to 9:25 a.m. New York time and an afternoon session from 4 p.m. to 4:15 p.m. This would complement the existing 9:30 a.m. to 4 p.m. window, effectively creating a near-24-hour trading schedule for selected options. The move reflects growing demand from investors and the broader trend of equity exchanges extending hours to match activity in Europe and Asia.
**Selective Rollout to Ensure Liquidity**
Unlike full-scale stock exchanges, the Cboe plans a cautious approach, limiting extended trading hours to a subset of equity options. The exchange will prioritize contracts based on metrics such as volume, market capitalization, and share activity, ensuring liquidity and stability. In a statement, the Cboe emphasized that the initiative is “an incremental but meaningful step” toward a 24×5 trading model, allowing investors to better manage risk and adjust positions outside regular market hours.
The proposal comes as equity option volumes have surged, driven by the rise of retail investors and the popularity of zero-day-to-expiry contracts. According to data from the Options Clearing Corporation, volumes climbed 68% to 1.29 billion contracts in September 2023, up from 763 million two years prior.
**Infrastructure Challenges and Industry Collaboration**
For 24×5 trading to become a reality across major U.S. exchanges, the nation’s clearing and data infrastructure must evolve. The Depository Trust & Clearing Corporation (DTCC), which handles settlements, plans to begin clearing equity trades during extended hours starting in the second quarter of 2024. Meanwhile, Securities Information Processors (SIPs), responsible for disseminating real-time price data, are preparing to extend their data-feed processing to nearly 24 hours a day, five days a week.
Currently, only a few brokerage platforms, such as Robinhood and Interactive Brokers, offer 24-hour, five-day access to U.S. stocks through alternative trading systems like Blue Ocean and Bruce Markets. Once DTCC and SIPs fully synchronize their systems, major exchanges like the NYSE and Nasdaq could bring this flexibility to regulated markets.
**Industry Reactions and Market Outlook**
The NYSE’s chief product officer, Jon Herrick, called the development “a step closer to expanding global access to U.S. exchange liquidity.” Meanwhile, the broader market has shown optimism, with the Dow Jones Industrial Average surging 1.12% to 46,706.58, the S&P 500 rising 1.07% to 6,735.13, and the Nasdaq Composite climbing 1.37% to 22,990.54 on Monday.
As Cboe’s proposal moves through regulatory review, the push for extended trading hours underscores a shifting landscape for U.S. markets. With infrastructure upgrades underway and investor demand growing, the path to 24×5 trading is gaining momentum—potentially reshaping how global markets interact and how investors navigate volatility.
**Upcoming Earnings Season**
Investors are also watching for key quarterly reports from major companies, including Netflix, Coca-Cola, Tesla, and Intel, as earnings could further influence market sentiment amid broader macroeconomic challenges. The intersection of regulatory innovation, technological readiness, and investor behavior will likely define the next chapter of U.S. financial markets.