NSE Stock Market Closing Time To Change For Equity Derivatives: Here’s How It Will Impact Traders

Stock Market Alert: The normal market closing time for the equity derivatives segment will be extended by 10 minutes from August 3, announced the National Stock Exchange (NSE). The recent change was made as part of the rollout of the Closing Auction Session (CAS).

The recent NSE market trading extension would ensure smoother coordination between the cash and derivatives segments at the time of stock market closing. Let's understand how it will impact traders and investors.

NSE Equity Derivatives Trading Time

As part of the revised schedule for stock market trading by the NSE, activity in the equity derivatives will now close at 3:40 pm, instead of the current 3:30 pm time. This would give additional time to F&O traders to settle their investments and make their bids.

The normal market closing time for equity derivatives contracts will be extended to 3:40 pm, NSE informed market participants in a circular issued on Friday. The recent change in closing time for equity derivatives will be implemented based on the latest closing auction mechanism.

Apart from the NSE market trading closing time in the equity derivatives segment, other session timings like pre-open session and trade modification window will remain unchanged. Provisions related to price bands and pre-trade risk controls, including connection with the Closing Auction Session, will also be applied to the equity derivatives segment. The ultimate aim with this change is to ensure smooth transitioning and consistency between the cash and derivatives markets during the end-of-day trading process.

Followed by the introduction of the Closing Auction Session in the cash market, the operating price range for stock futures contract changes (if made) will be informed by the NSE in future.

Outstanding orders that do not come under the revised price range will be automatically cancelled as per the norms.

What is Closing Auction Session?

Closing Auction Session (CAS) is a short trading period at the end of the day. During the trading session, market participants can submit, buy, or sell orders to determine a single, fair closing price for a security.

The CAS will be implemented in a phased manner. The initial phase will include only the closing price of stocks with derivative contracts. It will be determined through CAS, whereas for all other securities in cash segment, the closing price will be determined based on the already existent method.

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