SEC plan participants file overnight price band protections for U.S. stock trading

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Overnight price band protections

Highlights

Nasdaq and other National Market System participants filed the Twenty-Seventh Amendment on May 27, 2026, to implement temporary overnight price band protections.
The SEC proposal establishes a two-phase rollout, beginning with interim protections modeled after alternative trading systems to curb sharp price swings in overnight sessions.
Participants will collect overnight trading data during the interim phase before finalizing permanent protections, aiming to prevent volatility events like the May 6, 2010 Flash Crash.

Temporary safeguards for overnight session

As reported by the Securities and Exchange Commission, Nasdaq and other participants in the National Market System plan filed the Twenty-Seventh Amendment on May 27, 2026, to establish temporary price band protections for overnight trading. The proposal is submitted under the Securities Exchange Act of 1934 and reflects changes unanimously approved by the plan participants.

The amendment is designed to add what the filing calls Overnight Protections in anticipation of overnight trading by certain national securities exchanges. The Commission is publishing the notice to solicit comments from interested parties on the proposed changes.

The filing comes from Nasdaq on behalf of Nasdaq Texas LLC, Nasdaq PHLX LLC and The Nasdaq Stock Market LLC, together with other exchanges and market organizations including Cboe EDGX, Financial Industry Regulatory Authority, Investors Exchange, Long-Term Stock Exchange, MEMX, MIAX PEARL and multiple NYSE venues.

Two-phase rollout for market stability

The proposal follows the broader framework of the Plan to Address Extraordinary Market Volatility, originally filed with the Commission on April 5, 2011. That plan created the marketwide limit up-limit down mechanism for NMS stocks to curb trades outside specified price bands and to work alongside trading pauses during sharp price moves.

The participants say the overnight expansion takes a cautious approach because of the distinct conditions in overnight markets. In the first phase, protections would be based on mechanisms already used by certain alternative trading systems to limit sharp short-term price swings in individual securities.

During that interim phase, participants plan to gather and analyze overnight trading information before drafting a final proposal for the overnight session. That later amendment would remove the temporary measures and replace them with revised overnight protections intended for longer-term use.

The filing also ties the need for these controls to the plan's original purpose of addressing extraordinary volatility, including disruptions such as the May 6, 2010 Flash Crash.

In our earlier article on Broadcom (AVGO), we looked at the stock’s bullish momentum ahead of its fiscal Q2 2026 earnings and how its AI-integrated broadband chip launch added to the near-term catalyst mix. We also highlighted key technical levels and the trading range to watch, noting that stretched conditions can lead to consolidation while support zones remain crucial during volatile stretches in the market.

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