U.S. Stock Trading Hit a Record High on the Night of the Election

On Tuesday night, millions of Americans were fixated on their screens, watching the outcomes of the U.S. general election unfold. Meanwhile, investors were equally focused on monitoring their portfolios. Brokerages offering extended trading hours saw a surge in activity as election results trickled in, signaling high market engagement around the event.

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Robinhood Markets Inc., an online brokerage known for its commission-free trading, reported a massive increase in trading volume during the overnight session, its largest since launching 24-hour trading last year. Robinhood stated that its overnight trading activity was 11 times its usual notional volume. The platform executes these overnight trades through Blue Ocean Technologies LLC, which operates an alternative trading system (ATS) from 8 p.m. to 4 a.m. Eastern Time. According to a spokesperson, Blue Ocean reached a new record with 3.27 billion shares traded on election night.

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In a recent interview with MarketWatch, Blue Ocean indicated that on a typical night, it sees roughly 30 to 40 million shares traded on its ATS. Given this baseline, the election night volume represented a significant spike, nearly 100 times the average, reflecting the unique impact of the election on investor behavior.

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Blue Ocean, although partnered with several U.S. brokerages like Robinhood, derives much of its trading volume from investors in the Asia-Pacific region. These international traders, anticipating potential market shifts based on a new Trump administration, likely contributed to the heightened activity as they sought to position themselves around the election’s implications for specific sectors and companies.

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Another brokerage that experienced a notable increase in overnight trading volume was Interactive Brokers Group Inc. The platform processed an impressive 349,910 trades on election night, comprising 188,168 U.S. stock trades and 161,742 U.S. derivative trades. Steve Sanders, executive vice president of marketing and product development at Interactive Brokers, previously mentioned to MarketWatch that the company typically observes a slowdown in both trading activity and new account sign-ups leading up to a major election. Once the election results are finalized, however, investors tend to return to the platform, driving up activity levels.

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The heightened trading momentum continued into Wednesday, with major stock indices seeing substantial gains. The Dow Jones Industrial Average surged by 3.6%, marking its most significant post-election increase since 1896. The S&P 500 followed with a 2.5% gain, and the Nasdaq Composite rose 3%. This robust market reaction underscored investors’ optimism following the election, as they anticipated the economic implications of the political landscape.

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Robinhood’s substantial increase in activity reflects a growing trend in the retail trading sector, where individual investors have taken a more active role in responding to political and economic developments. As online brokerages like Robinhood make extended trading hours accessible, individual investors are increasingly able to respond to news in real-time, particularly during high-stakes events like the U.S. election. The platform’s 24-hour trading window, supported by Blue Ocean Technologies’ ATS, allows Robinhood users to trade beyond regular market hours, making it a valuable resource for those wanting to act immediately on news or market shifts.

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The surge in activity through Blue Ocean’s ATS further emphasizes the influence of global events on financial markets, particularly as investors from regions like Asia-Pacific engage in U.S.-based trading. Many international traders are increasingly responsive to U.S. political events that might impact key sectors, with the U.S. election prompting them to recalibrate their positions. Their participation is notable because it underscores the global reach of U.S. elections, affecting not only domestic traders but also international participants with vested interests in the U.S. market.

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Interactive Brokers' record overnight volume points to similar behavior among its clients, who were quick to act on election night. According to Sanders, while activity tends to decline in the lead-up to an election due to uncertainty, investors often re-engage with the market once the outcome is clear. This trend suggests that traders value the ability to quickly reposition themselves based on a decisive election result. Interactive Brokers' sizable derivative trading volume on election night also indicates a strong interest in hedging strategies and alternative investments, as investors looked to manage potential market volatility.

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The post-election surge in the Dow Jones, S&P 500, and Nasdaq indices on Wednesday further validated investors’ optimism following the election. The Dow’s 3.6% gain, its largest post-election increase since the 19th century, highlights how investors perceived the election results as a positive for economic and market stability. Similarly, the S&P 500’s 2.5% gain and the Nasdaq’s 3% uptick reflect broader confidence, as investors responded positively to the potential economic policies expected to follow the election outcome.

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In summary, the U.S. general election fueled unprecedented levels of engagement in overnight trading, as brokerages like Robinhood and Interactive Brokers recorded significant volume surges. This increase in trading activity underscores the vital role that political events play in shaping investor behavior and highlights the broader impact of 24-hour trading options on the accessibility and responsiveness of modern investing. With international traders also heavily involved, the election not only influenced U.S.-based portfolios but resonated globally, further amplifying the night’s financial impact.

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