CHICAGO (AP) -- The Chicago Stock Exchange said today it has approved after-hours trading for institutional and individual investors, the first exchange to do so.

The nation's third largest stock market said it will add two extra hours of trading to thwart encroachment from electronic trading. Pending regulatory approval, it hopes to add the extra hours Oct.1.The Chicago Stock Exchange's move comes as other exchanges across the country move to extend stock trading into the late evening and early hours.

Both the Nasdaq Stock Market and the New York Stock Exchange are seeking to extend their hours as financial markets and electronic trading businesses offer added competition, but their plans have been bogged down by what had been a failure to cooperate on exact hours for extending trading.

With U.S. markets' current hours of 9:30 a.m. to 4 p.m. Eastern time, investors on the West Coast get shut out after lunch. Between 20 percent to 25 percent of online trades by individual investors are placed after hours.

The Chicago exchange's board of governors late Thursday approved a proposal to trade all S&P 100 and Nasdaq 100 issues between 4 p.m. and 6:30 p.m. The exchange also will allow limited trading of the 50 to 100 most-active non-S&P 100 and non-Nasdaq issues.

One key difference between the regular trading hours session and the new extended hours session is that investors will only be able to enter limit orders in the extended hours session. A limit-orders-only rule will protect investors while this market matures and gains liquidity.

The Chicago exchange said it expects fast approval from regulators because it already has a sophisticated electronic trading system in place and would have minimal effects on staffing.

Extending hours is expected to put additional stress on the financial service industry, which is currently scrambling to fix any potential Year 2000 computer problems and switch next year to stock prices quoted in decimals instead of fractions.