Nasdaq, one of the world's leading stock exchanges, has announced plans to extend its trading hours to cater to the growing demand for U.S. stocks, especially from retail investors across different time zones.

Nasdaq President Tal Cohen shared this initiative on LinkedIn, highlighting the exchange's commitment to improving accessibility for global investors.

The move comes in response to increasing interest in U.S. stocks, with more investors worldwide eager to participate in U.S. market activity. By extending trading hours, Nasdaq aims to provide more opportunities for international investors to buy and sell U.S. stocks at times that are more convenient for them.

However, Cohen also pointed out several risks tied to this expansion. One of the main concerns is the potential for increased volatility, meaning stock prices could swing more dramatically. Additionally, the extended hours could lead to higher transaction costs, making trading more expensive for investors.

For this plan to succeed, Nasdaq will need to upgrade its system that displays real-time stock prices, known as the Securities Information Processor (SIP), to handle the additional hours of operation.

Despite the longer trading window, Cohen acknowledged that liquidity, or the ease of buying and selling stocks, would be "significantly lower" during the extended hours compared to regular trading times.