Extended trading hours have moved from a fringe idea to a serious market structure debate, fueled by US equities. The question is no longer whether markets can trade longer hours, but whether market participants are equipped to operate effectively when they do.
The major US stock exchanges have filed for regulatory approval to offer 24/5 trading, while the US equities clearinghouse plans to extend clearing hours. In Europe, the conversation is less advanced, but exchanges, infrastructure providers, and industry bodies are exploring continuous trading models, albeit with more circumspection.
Conference panels often raise the concern that market structure isn’t ready to support continuous trading. But arguably, it already does.
Traders must be ready to capitalize on opportunities. Foreign exchange and crypto markets already operate continuously, and futures trade nearly round the clock on venues like CME’s Globex. At TS Imagine, we have years of experience supporting market participants across these asset classes with continuous pricing, real-time risk monitoring and margin management in always-on environments.
So, while tech and infrastructure can support 24/7, for buy-side traders, the question really is: Where is the liquidity?
Liquid auctions
Rather than being more or less evenly distributed across the trading day, activity in equity markets is increasingly converging around specific liquidity events, notably closing auctions, which now capture a meaningful share of daily trading volume. In major European exchanges, the closing auction can account for as much as one third of total volume.
These dynamics have introduced risks for financial institutions. Thin liquidity outside peak windows can amplify price movements in unexpected ways, widen spreads, and increase execution costs for larger orders.
As liquidity becomes more concentrated at specific points in time, trading desks must reassess how they manage intraday risk, how they source liquidity, and whether their infrastructure supports decision-making when conditions shift abruptly.
Real risks
Extended trading hours are therefore fundamentally a risk management conversation. Buy-side traders must be prepared to trade wherever and whenever liquidity emerges.
As equity market structure evolves and liquidity dynamics shift, trading desks must be equipped for a range of possible outcomes, whether that’s continuous markets or concentrated ones.
Without real-time risk monitoring, robust margin and exposure controls, and the ability to respond intraday, financial institutions will struggle to operate safely and competitively under changing conditions. This is especially true as multi-asset strategies become more popular for alpha generation and risk hedging.
This is all happening at a time when trading desks are under ever more pressure to justify their existence, as asset managers scrutinize costs. For desks that want to remain indispensable, the ability to demonstrate measurable contribution to alpha through data-led decisions and consistent best execution is non-negotiable.
How we can help
For sophisticated institutions, a best-in-class execution management system (EMS) in conjunction with an order management system (OMS) remains the most effective operating model to meet these demands.
TS Imagine is well-positioned to help buy-side firms adapt as trading hours and liquidity dynamics evolve, offering:
- Deep multi-asset pedigree, including years of experience supporting continuous markets like FX, futures, and crypto, as well as global equities and fixed income.
- Real-time risk management trusted by some of the world’s largest financial institutions to monitor exposures, manage margin, and control risk in always-on environments.
- A proprietary multi-asset FIX networking, providing native connectivity across asset classes that reduces operational failure points and acelerates onboarding.
- Always-on, resilient SaaS infrastructure, built to support intraday shifts in liquidity.
Whether the trend is longer trading hours or greater convergence around auctions, the priority for the buy side is the same: quality execution, real-time risk controls, and the flexibility to operate wherever liquidity forms.
