NSE :To improve price discovery, the will implement pre-open sessions for futures and options
NSE: In order to promote price discovery, provide transparency on gap changes, and control volatility, the National Stock Exchange (NSE) will begin offering a 15-minute pre-open session for equities futures and options on December 8.
According to the exchange, the pre-open session is a 15-minute call auction window that runs from 9:00 am to 9:15 am and is used to set starting prices for index and single-stock futures before the normal trading session.
Orders may be entered, modified, and canceled throughout this session until a random closure occurs between 9:07 and 9:08 am. Up to 9:12 am, price discovery and trade matching will take place. At 9:15 am, the market will switch to continuous trading after a three-minute buffer.
According to the exchange, the action brings the derivative market into line with the pre-open call auction for the equities cash market.
Before the real launch, brokers and participants will have a short testing window thanks to the mock trading scheduled for December 6.
before to being extended to next-month contracts in the last five trading days before to expiration, the mechanism will first cover current-month futures on individual equities and indexes.
According to the statement, the framework does not include options, spreads, or corporate-action ex-dates.
Data on order imbalances and suggested opening prices will be available to traders in real time. During the pre-open session, stop-loss and immediate or cancel orders (IOC) are prohibited, but limit and market orders are permitted.
While unmatched market orders change to limit orders at the found starting price, unmatched limit orders will transfer to the regular market with the original time stamp.
With the NSE’s equities derivatives turnover rising from Rs 177 trillion in FY10 to over Rs 40,000 trillion in FY25 at a cumulative annual growth rate (CAGR) of almost 43.5%, India’s equity derivatives market has expanded at an unprecedented rate.