How to Meet the Challenges of T+1 and 24/5 Trading
Over the years, equities have been among the most stubborn markets in resisting the increased interest in expanded trading hours and round-the-clock trading.
Once upon a time, traders with a late-night speculative itch to scratch were limited in their options. Foreign exchange was their asset class of choice due to the three overlapping trading sessions on global FX markets, from Sunday to the following Friday.
Then came crypto, the market that literally never sleeps, raising the bar by extending trading hours to 24/7. In fact, as crypto has moved into the mainstream and become increasingly correlated with US equity markets, it’s not unheard of for US stock traders to use assets like bitcoin as a proxy, enabling them to express directional stock market views on the weekend.
As trading becomes increasingly democratized, a new global class of speculators, both retail and institutional, have emerged. They demand access to a full spectrum of assets, not just those available in their own jurisdictions.
This has led to the shortening of settlement times across the globe, the gradual introduction of expanded trading hours for exchange-traded securities, and now the final regulatory push to allow these markets to trade around the clock throughout the working week.
As we’ll see below, this trend has not been without its obstacles. Taking the US’s recent move to T+1 as a case study of sorts, we look at the various factors that have influenced this move, the manner in which the transition was handled, and what financial services firms can do to prepare for increased uptime in a world where 24/5, and eventually 24/7, trading become the norm.
US exchanges are moving towards 24/5 trading
Earlier this year, NYSE received the green light from the SEC to expand trading on its exchange to 22-hours per day.
In March of 2025, Nasdaq announced its intention to move to 24/5 trading next year. The firm is currently engaged with US regulators, seeking approval for this desired move. Barring any unforeseen pushback from the SEC, Nasdaq aims to have 24/5 trading up and running in the second half of 2026.
The New York Stock Exchange and Nasdaq aren’t the only exchanges currently pursuing this path. The CBOE is also seeking to bring 24/5 trading to its EDGX Equities exchange and is currently awaiting SEC approval for the expansion of its own trading day.
It’s clear that US equities markets are seeing the value in the increased liquidity that longer trading hours will bring, particularly from international traders. As the general barriers to entry for investors have come down, and retail traders have emerged as a force in their own right, making these highly sought after markets available for traders in a wider variety of time zones is becoming a no-brainer.
T+1 settlement and 24/5 trading go hand in hand
Settlement times and trading hours are not unrelated phenomena. The reduction of settlement times has enabled a move toward progressively longer trading days in US equities markets.
This trend coincides with the diversity of market participants and increased participation from individual investors, both on US soil and abroad. Since 2017, the US has moved from T+3 settlement to T+2, and then from T+2 to T+1 in May of last year.
Consider how this timeline coincides with the explosion in popularity of zero-commission brokerage app, Robinhood, which went from 2 million to 6 million annual users between 2017 and 2018, topping out at 22.5 million users in 2021.
The shortening of settlement cycles was a precursor to the expansion of trading hours. This is because shorter settlement times necessarily lessen the buildup of credit and reduce counterparty risk in the financial system. This is important if trading is to be conducted around the clock without the traditional gaps that permitted trade reconciliation practices to catch up with market activity.
Increased participation from a far more diverse and unpredictable group of investors made this even more of a necessity. The pandemic was a great eye-opener in this respect, as it provided conditions that were most conducive to that unprecedented surge in retail trading activity that Robinhood’s exploding user count testifies to above.
The volatility of US markets during the meme stock period gave Wall Street a severe chastening and highlighted how existing systems and processes were becoming unfit for purpose in certain market conditions.
The importance of collaboration between firms
The US took its time in transitioning from T+3 to T+1 settlement. As the largest and most impactful equities market in the world by far there was a lot at stake in this move. This may have been why there was such a pronounced gap between the T+2 move in 2017 and the most recent switch to T+1 in May of 2024.
The post-game analysis conducted by the industry revealed collaboration between firms as an important part of the process. Collaboration between rival businesses may sound like a contradiction in terms, but it proved to be crucial to the sharing of teething problems and organizational solutions.
Firms participated in working groups and were actively engaged with regulatory bodies throughout, helping them to identify the specific issues they would face and allowing them to more accurately budget for the internal changes they would have to make.
Coordination between other regional markets also proved to be important. Like the US, Canada and Mexico also switched to T+1 in 2024. It made sense for this to be the case due to the manner in which these markets are interconnected. We see this taking place in Europe, too, with the European Union, Switzerland, and the UK all planning their own transition to T+1 in 2027.
Trade associations came into their own throughout the move to T+1. The Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (SIFMA) were central to the management of communication efforts between firms and regulators as the transition was taking place.
We might expect similar coordination to be conducted by bodies like the Association for Financial Markets in Europe (AFME) and the Investment Association (IA) when the time comes for the 2027 move to T+1 in Europe.
How we navigate system change
Often, even when change looms just over the horizon, there can be resistance to initiating the necessary responses to that change. Firms become accustomed to working around their various systems as they start to show signs of aging. It can often seem easier to remain with the certainty of an imperfect setup, rather than stepping into the unknown and setting a plan to upgrade in motion.
This sounds counterintuitive, but we see it all the time. Aside from the costs involved in overhauling infrastructure that’s rapidly proving not to be fit for purpose, there are high stakes involved in deciding what to improve and how to improve it.
The problem with this approach is that it kicks the can down the road. In the meantime, firms end up spending more over time (both in terms of development costs and human capital) to work around issues that ought to be addressed head-on. It’s even costlier when you factor in the cost of accrued technical debt, the buildup of vulnerabilities, and the manner in which legacy systems quickly become uncompetitive when rival firms start overhauling their own systems.
At Devexperts, one of the things we place a great deal of emphasis on is the discovery phase when working with a company. This complex process involves taking stock of all the systems the company is currently running, how they depend on each other, which components the business is currently locked into, what the current issues and obstacles are, and what the business’s requirements will be, going forward.
This is a delicate process that takes time and cooperation. We believe that change for its own sake, implemented without the prerequisite groundwork, can be as much of a hindrance to the business as sticking with old systems that are past their sell-by dates.
Additionally, we’re not there to bamboozle the client into scrapping everything and taking on our all-new, super-duper, turnkey solution. We’re there to solve specific issues and help the business meet its current and future challenges in the least invasive way.
Our APIs are open for this reason. We want to encourage firms to get our software to do what they need it to do, without having to lock themselves into our ecosystem. And we’re highly collaborative with other vendors, with a myriad of third-party integrations already in place so that our solutions can ship in as little time as possible.
We also have a great deal of industry experience, which makes us a valued consultant when infrastructure changes have to be made in order to meet the demands of an evolving investment landscape.
Some guidelines when uptime is a priority
Devexperts is asset-agnostic and has gained a great deal of experience in a variety of markets where continuous uptime is non-negotiable. Aside from our work in listed securities and derivatives markets, we also provide software solutions and entire trading infrastructures for FX brokers and crypto exchanges, both of which are required to maintain uptime around the clock.
Our software has been tested in a variety of jurisdictions and market conditions. One of our recent clients, an Indonesian crypto exchange, recently announced 365 days of continuous uptime using our DXmatch matching engine.
When we implement a brokerage or exchange solution, we rely on an assortment of strategies to ensure that these businesses can provide their services at scale, in highly volatile environments. All while being resilient to attacks and maintaining their ability to rapidly upgrade system components and make changes to business logic on the fly.
To ensure the above, the system in question cannot be shut down in order to perform maintenance or for business functions to be altered. When this is the case, we recommend modular systems that can be updated on the fly. Rolling restarts allow individual components to be updated without interrupting overall system performance.
In the case of business logic, such as the adding of new assets or the changing of risk management parameters, we recommend that all changes of this kind are made via an administrative application that does not require system restarts or the assistance of technical teams.
These kinds of changes are made often, yet it’s not uncommon for financial firms to require them to be made in code by technical team members. Some forethought at the planning and development stage can save firms time and money when it comes to this common requirement.
Last but not least, all financial services firms for which uptime is mission-critical will require some kind of replication strategy. By running multiple instances of all functions, such as matching engines and databases, as well as the relevant consensus algorithms to ensure that all copies are in agreement, a functioning duplicate can take the place of any system that is experiencing technical issues. Replication can also be used as a scalability strategy. By splitting off the asset roster and assigning different groups of symbols to different matching engine copies, horizontal scaling may be achieved.
Conclusion
As 24/5 trading becomes the new norm, and traders grow accustomed to the value of 24/7 trading, as in the case of crypto markets, more emphasis is being placed on operational resilience.
Modern financial businesses will be required to update their systems so that the round-the-clock nature of modern markets can be reflected in their own offerings.
To make this a reality, brokers and exchanges will have to analyze their existing infrastructures, source competent consultants and vendors, and upgrade their systems to meet the challenges of contemporary trading.
As always, we at Devexperts are here to help. If your business is currently thinking about how to upgrade its systems for increased resilience, uptime, and scalability, please get in touch with our team. We’d love to be part of the conversation.