New Delhi: Changes are being made to stock market trading timings. The Securities and Exchange Board of India (SEBI) and the National Stock Exchange (NSE) are jointly introducing a Closing Auction Session (CAS) for stocks included in the Futures and Options (F&O) category.
This move will alter the existing system for determining closing prices in the stock market. While long-term investors will remain unaffected, this change will be significant for F&O traders, brokers, institutional investors, and passive funds.
The most significant impact of the new rule is that the stock market will no longer have a single closing time. Normal trading for non-F&O stocks will continue until 3:30 PM, just as before; there are no changes to this schedule. However, continuous trading in the cash market for F&O stocks will conclude at 3:15 PM. This will be followed by a Closing Auction Session running until 3:35 PM. Additionally, trading hours for stock and index F&O have been extended to 3:40 PM. Finally, a post-close session will take place between 3:50 PM and 4:00 PM.
10 Extra Minutes for the Equity Derivatives Segment
The National Stock Exchange (NSE) has extended trading hours for equity derivatives by 10 minutes. In this section, investors will be able to trade until 3:40 PM instead of 3:30 PM. Trading hours have been extended by 10 minutes to align derivatives trading with the new auction-based closing process introduced in the cash market. This will enable traders to manage their positions more effectively.
F&O Stocks Will Not Close Like Regular Shares
For stocks that are part of the F&O segment, normal continuous trading will cease at 3:15 PM. Instead of trading continuously until 3:30 PM, these stocks will move directly into the closing auction session. During this special session, all orders will be aggregated and matched to determine a final closing price. For stocks not included in the F&O segment, normal trading in the cash market will continue until 3:30 PM, as usual.
How the New Closing Auction Session Will Work?
The new auction process will operate according to a strict schedule. Between 3:15 PM and 3:20 PM, the market will transition from regular trading to the auction session, and the reference price will be calculated. Subsequently, from 3:20 PM to 3:25 PM, both market orders and limit orders can be placed. Between 3:25 PM and 3:30 PM, only limit orders will be accepted, and no modifications to market orders will be permitted. Random order entry will close between 3:28 PM and 3:30 PM. Finally, the closing price will be determined by matching orders between 3:30 PM and 3:35 PM.