Tokenized Stocks Offer Overnight Signals as Nasdaq Plans Extended Trading

Tokenized stocks are providing price signals while US exchanges are closed, but thin liquidity and higher volatility remain key risks. IMF research found that 87% to 99% of overnight price moves in selected tokenized equities were reflected in corresponding conventional shares within the first five minutes of the next session. More than half of trading took place outside regular US market hours. The study covered tokenized exposures to the S&P 500, Nasdaq 100, Tesla, Alphabet and Nvidia across 11 venues, including Ondo and xStocks products. It found tokenized stocks had about 1.5 times the realised volatility of conventional shares and were less liquid, particularly on decentralised exchanges and low-volume venues. The IMF warned that continuous trading and automated liquidations could amplify price swings, and said always-on markets may need tailored safeguards. The findings show a relationship between tokenized and conventional share prices, not proof that token trading causes moves in the underlying stocks. Nasdaq is targeting 9 p.m. to 4 a.m. Eastern Time weekday trading from Dec. 6, subject to infrastructure readiness and regulatory changes; the plan includes a daily one-hour pause and weekend closure. Other exchanges are also preparing extended-hours trading, while TD Cowen expects limited US demand and highlights execution risks in thin sessions. Morgan Stanley has pushed its expected tokenized-equity rollout to Q1 2027. For crypto traders, tokenized stocks may offer earlier price discovery and access outside exchange hours, but the developments are not an immediate market catalyst. Liquidity, regulation and execution quality remain important risks, and broader exchange hours could reduce the overnight advantage while leaving weekends distinct.