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Pre-Open Session of trading

Submitted by Asif Nowaj, Last Modified on 2019-11-08

Trading takes place in all business day except Saturday, Sunday and holidays that already declared by the Exchange in advance. Though Exchange can open the market for trading for any days that were declared as holiday or it is Saturday or Sunday and also can close the market on any business day, or can extend the timing of the trading or short as well as per necessity. It happens from 9:00 am to 4:00 pm.

There are different types of segments in market capital like equities, derivatives and debt etc. Here, I’ll talk about one of the major segment Equity.

The market timings in this segment is divided in three sessions:
1. Pre-Open Session
2. Regular Session
3. Closing Session

Pre-Open Session:
In pre-open session, call auction [I’ll write on that later] trading mechanism is acts on it. The exchange has introduced this call auction process in the pre-open session from October 18, 2010. This pre-open session is a fine initiative from Exchange to reduce the price volatility, better price discovery, minimized impact cost and greater liquidity.

Sub session details

After 9:15 am, continuous trading session starts till 3:30 pm, it occurs continuously as orders match at time/price priority.

In Order Entry Period, Exchange will collect all the buy orders as well as sell orders. You can place new orders, modify it or you can delete it at this time. You can place any products (Cash, Intraday and Margin) during this period. There are pre-defined list of scrips by the Exchange, in which pre-opening trading session is allowed. Trading in other scrips and F&O contracts begin at 9:15 am when normal trading session begins. You cannot place orders beyond 20% of the previous day’s closing price. It shows indicative price index. Orders are not executed during this period.

In Order Matching & Confirmation Period, on the basis of the order received Exchange arrives at the opening price and trades the matching orders. You cannot modify or delete the orders during this period. This phase is called price discovery period.

Buffer Period is nothing but the transition period between pre-open period and continuous trading session. All the unexecuted orders may be cancelled, forwarded to the continuous trading session or kept pending the next call session depending on the Exchange specification.

Happy Trading!!!

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