New Delhi: A big change for investors and traders trading in the Indian stock market is going to be implemented from 8 December, Monday. The National Stock Exchange (NSE) has decided to start a pre-open session for the Equity Derivatives (F&O) segment. This change will have a direct impact on those trading in index futures and stock futures. Until now, the pre-open session was applicable only for the equity cash segment, but now the derivatives segment is also being included in it. According to the NSE, the duration of this new pre-open session will be 15 minutes, which will run from 9:00am to 9:15am. Within this 15 minutes, the opening price of the market will be decided through the call auction process.

NSE F&O Pre-Open Session: What Derivatives Traders Need to Know

The new pre-open session will be divided into a total of three phases. The first phase will be the order entry period, which will run from 9:00 AM to 9:08 AM. Traders can enter, modify, or even cancel their orders during this time. The special thing is that the system will implement random closures at any time between the 7th and 8th minutes, preventing any last-minute manipulation.

NSE F&O Call Auction

The second phase will be order matching and trade confirmation, which will run from 9:08am to 9:12pm. During this time the system will calculate the opening price (Equilibrium Price) based on all valid orders and trades will be matched at the same price. This price will be considered the opening price of the market. The third and final phase will be the buffer period, which will be from 9:12pm to 9:15pm.

Traders will be allowed to place both limit and market orders during the order collection period. However, special types of orders such as stop-loss and IOC will not be valid at this stage. During this time traders will also get to see real-time indicative price, opening price and supply-demand data.

No order changes or cancellations will be allowed during the order matching period. NSE will first match the limit orders, then the remaining limit orders will be matched with the market orders and finally the market orders will be matched.