Markets are already able to trade 24 hours, but for now, all of the overnight trading happens off-exchange — meaning there is no overnight consolidated tape or NBBO quotes to protect investors from trading at expensive prices. 

Today, we break down the data from dark pool trades overnight. The results are (mostly) a pleasant surprise, which should help U.S. regulators and exchanges when thinking about how to expand investor protections — from the NBBO to volatility circuit-breakers — that investors during the day take for granted, especially when calculating these becomes more complicated given the lower liquidity we see in the depths of the U.S. night.

Academic research found overnight trades were much more expensive

Recall our earlier summary of academic research found that the costs of trading after hours were significantly higher than the costs of trading during the U.S. day.

A couple of papers found that bid-offer spreads widened around 3x. Another study found most trades crossed the whole spread, which resulted in effective spreads increasing even more. These factors, combined with lower depth and liquidity, reportedly pushed impact costs up 6-fold.

Chart 1: Academic studies show overnight trading is more expensive

This all supports the concerns participants have to improve overnight investor protections.

Looking at overnight stock volatility 

But just how volatile are overnight markets (compared to the same stock during the day)?

In today’s analysis, we compare the range of trade prices for all stocks at all times of the day. We then compare the range of traded prices in the day to the range of prices overnight (specifically 8 p.m.-4 a.m.). 

To see what we mean, consider the example stock in Chart 2 below.

• Overnight trades are shown by the grey dots. On this date, they print in a pretty narrow range (grey box).
• Core trading hours trades are shown by blue dots. On this date, we see a large range early in the morning (blue box).

In this study, we compare the overnight range (grey box) to the day range (blue box). 

Chart 2: Following traded prices throughout a 24-hour day  

Overnight stock volatility is generally in line (or better) than daytime volatility

We repeat the above exercise for all stocks, over 20 days in January 2026. For each stock, we: 

• Calculate the ratio of overnight prices to core session prices.
• Calculate and average of that range.

We plot this data for each ticker in the chart below.

Chart 3: Overnight trades typically have smaller ranges than day session prices 

Importantly, the data shows that most stocks typically have a lower overnight trading range than day trading range (the dots are mostly below a ratio of 1:1).  

There are a few other observations we can make from the data:

• Large-cap stocks: Almost all tickers have a ratio well below 1 and the median (where the grey boxes meet) is closer to 0.4. The same is true for the rest of the Russell 3000 stocks.
• Exchange-traded funds and other stocks: The majority have smaller trading ranges overnight (the top of the grey boxes includes 75% of all dots).
• Lower-priced stocks (typically smaller cap): Tend to have relatively more volatility overnight compared to their day session ranges (dots on the left side of each chart are higher). Although most are still below the 1:1 range.
• Less liquid overnight stocks (red dots are low value traded): Tend to trade with less, but with more overnight volatility.

Protecting overnight traders is driving 23/5 exchange trading

As the popularity of investing in U.S. companies increases, brokers want to be better able to protect their investors from bad executions, regardless of what time it is in the U.S. That is a key diver toward 24-hour exchange trading in the U.S., which is expected to start in December 2026.

Overall, these results are a pleasant surprise. Although they are averages, they don’t support the view that overnight trades are consistently crossing very wide spreads and printing at prices far away from day session prices.

That’s important as the industry builds out an overnight consolidated tape and debates what price protections are appropriate.