The prospect of 24/7 trading in derivatives markets is becoming reality, but the industry has deep reservations. Lynn Strongin Dodds looks at the arguments for and against.
The prospect of 24/7 trading is gaining momentum but not everyone is on board. In fact, the proprietary trading community is split as to whether it will be beneficial or detrimental to derivatives markets, according to a recent report – the Proprietary Trading Management Insight Report, produced by Acuiti in partnership with Avelacom.
The report is based on a survey of the Acuiti Proprietary Trading Expert Network, which comprises senior proprietary trading executives around the world. It found an even divide with 37% of respondents feeling positive towards the concept of round-the-clock trading while a similar number – 38% – were negative. It noted that ultra-low latency firms were more in favour than point and click or algo firms.
The benefits for those in favour were the ability to react to news at any time followed by the opportunity to boost revenues and profits plus reduced overnight risk. Proponents also argued that there was a blueprint in place as several markets already run on a 24hour basis, but five days a week. This meant that many brokers and clearing providers, as well as larger proprietary trading firms operated a follow-the-sun models across global offices.
There was more agreement though on the challenges. The main concern for the majority of participants was the operational staffing and resources that would be required to sustain round the clock trading. Liquidity fragmentation and the ensuing market disruption as well as risk management complexity were also on the list.
Most respondents also recognised there would need to be some level of investment albeit only a small minority expected this would involve a doubling or more of their current cost base. In number terms this translated into around a third believing it would be sizeable while almost half said it would be minimal.
To date, the US is ahead of the curve which helps explains why the study found North American firms more supportive than their European counterparts. The country is already moving ahead on the equity front with the New York Stock Exchange (NYSE), Cboe Global Markets and Nasdaq announcing plans over the past few months to extend their hours, while firms including Clear Street, Trillium Surveyor and LiquidityBook unveiled partnerships with Blue Ocean Technologies to offer longer trading hours to their clients.
In addition, US regulators are doing a deeper dive into the derivative world. In April, the Commodity Futures Trading Commission (CFTC) launched a consultation on the overall implications for trading, clearing and risk management activity of allowing derivatives markets or swap execution facilities (SEF) to operate 24 hours a day, seven days a week.
The consultation period ended on 21 May 2025 and like the Acuiti report, reflected a divided industry with the Futures Industry Association (FIA) highlighting the many operational, infrastructure, and risk issues that need to be systematically identified, assessed, and resolved before the green light can be given.
By contrast, Cboe, which operates 23 hours, 5 days a week, was generally behind the move, viewing it as a “natural evolution.” The exchange thinks it will enable market participants to manage risk more continuously but emphasise that key safeguards such as investor protections, risk-management, operational resilience must not be compromised.
The Cboe also asked for greater transparency regarding how different entities plan to address the novel risks posed by trading/clearing outside traditional hours. It also suggested an advisory committee or industry roundtable to share ideas and coordinate.
In the meantime, the crypto markets seem to be moving at a pace with Coinbase becoming the first CFTC-regulated exchange to launch 24/7 for margined futures contracts in May. This is seen as a significant step in bringing a longstanding feature of native cryptocurrency markets closer to mainstream finance.
It will not be last due to President Trump who loosening the legislative reins. At the end of July, the President’s Working Group on Digital Asset Markets, released a comprehensive report outlining some 100 policy and legislative recommendations to position the US as a global leader in digital assets, blockchain innovation and the modernisation of financial infrastructure.
Against this backdrop, and the shift of equity markets to continuous trading, market participants including most of the Acuiti network think that 24/7 trading will become part of traditional derivatives markets. However, opinions diverge on the timeframe with just over a quarter anticipating it will happen over the next three years while 34% expect five years and 19% are looking at ten years or longer.
It is likely though that the members of the US derivatives trading ecosystem—designated contract markets (DCMs), swap execution facilities (SEFs), and others – will want to be at the start gating before it opens and will start adapting their operations to align with this potential industry shift.
