On Monday, U.S. exchange operator Cboe Global Markets is seeking to extend the trading hours for U.S. equity options, further pushing the American market towards "nearly round-the-clock" trading. According to documents filed with the U.S. Securities and Exchange Commission (SEC), Cboe plans to add two new sessions outside the regular 9:30-16:00 period: an early morning extended session from 7:30-9:25 and a post-close session from 16:00-16:15.

This move aligns with the broader trend of extending U.S. trading hours, as exchanges attempt to cater to the needs of overseas investors and increase overlap with the trading hours of the underlying stock markets. Currently, U.S. stock options trading volume is growing rapidly, driven by the rise of retail investors and a surge in 0DTE (zero days to expiration) contracts. According to OCC data, options volume reached 1.29 billion contracts in September, a 68% increase compared to two years ago.

Cboe stated that the extended trading hours currently only apply to specific single-stock options, with selection criteria including trading volume, market capitalization, and activity level. The initial implementation will be "limited in scope and restricted in session duration." The company said in a statement that introducing specific options during extended hours helps align with the underlying stock market and provides investors with flexibility to adjust positions and manage risks during non-traditional hours. It is also seen as an incremental step towards a "24x5" system.

Following the COVID-19 pandemic, demand for extended trading hours has increased significantly, as investors need to respond promptly to overnight market-moving events. Several trading platforms have successively supported extended trading. Brokers such as Robinhood (HOOD.US) and Interactive Brokers (IBKR.US) now allow investors to trade U.S. stocks "24 hours a day, 5 days a week" on off-exchange systems (such as Blue Ocean and Bruce Markets).

Cboe also proposed earlier this year to extend its stock trading from Sunday evening to Friday evening, stopping only on weekends. For genuine 24/5 trading to be implemented at the exchange level, such as on Nasdaq or the NYSE, simultaneous upgrades to the infrastructure of clearinghouse DTCC and the SIP (Securities Information Processor) would be required. DTCC has announced it will extend its clearing window starting in the second quarter of next year, and the SIP is also evaluating expanding trade data coverage to "nearly 24 hours."