NYSE American proposes extended trading hours for equity options
In brief
- NYSE American proposes pre-market (7:30–9:25 a.m.) and post-close (4:00–4:15 p.m.) options trading for highly liquid contracts
- Eligible options must average 150,000+ daily contracts with underlying equities worth $50 billion or more
- Cboe received SEC approval for similar framework May 28 but faces clearing infrastructure delays
The proposal: scope and eligibility
NYSE American's extended-hours framework would apply to roughly 100 of the most heavily traded, multi-listed equity options classes. To qualify, an option must meet two thresholds: an average daily volume of at least 150,000 contracts and an underlying equity with a market capitalization of $50 billion or more. The exchange plans to run biannual reviews to keep the eligible list current.
The early session would provide a two-hour runway before the regular open, addressing a structural gap in the current market. Equity markets already offer pre-market and after-hours sessions, meaning stock prices can move meaningfully before options traders get a chance to adjust their hedges. Extended options hours would narrow that window.
The clearing bottleneck
Cboe received SEC approval on May 28 for a similar extended trading framework, making it the first major options exchange to secure approval. But approval and launch are not the same thing. Cboe had initially targeted a July 13 launch date; that timeline slipped. The delay stems from required adjustments in clearing support.
The Options Clearing Corporation, which handles settlement for the entire US listed options market, needs to be fully aligned before any exchange can turn on extended sessions. As of late August, NYSE American's proposal remains pending SEC approval, with the broader industry still waiting on final implementation support from OCC and participating exchanges.
The liquidity challenge
Thinner liquidity outside core hours can lead to wider bid-ask spreads and more volatile price action, even in the most actively traded names. Pre-market options trading at scale remains uncharted territory, presenting potential infrastructure and liquidity challenges. The restriction to 100 of the most liquid classes is a deliberate hedge against these risks, but early execution will be closely watched by regulators and market participants alike.
