The leading stock exchange of NSE (National Stock Exchange) opens for trading at 9:15 AM and shuts at 3:30 PM. It is called the regular trading time of NSE. However, before the regular trading time, NSE also has a pre-open session. The nse pre open starts at 9:00 in the morning and last for 15 minutes. This time is very crucial for the market. To make money from NSE, traders should know how pre-open sessions can be effectively managed. If you are unaware of it, then we are here to guide you for the National Stock Exchange’s pre-open session-
What is NSE Pre-open Market?
Before starting the actual trading session at 9:15 AM, National Stock Exchange have a pre-open session. During this session, time slots are divided for booking orders, deal matching, and price determination. The National Stock Exchange started pre-open market sessions in 2010. The objective of the pre-open session is to stabilize the volatility of the share market. The activities that took place during the pre-open session helped in determining the opening price of shares on the basis of their demand and supply.
How does Pre-open Market Work?
NSE pre-open session works in the same way any other stock exchange’s pre-open session works. Let us understand the activities take place in 15 minutes-
- 09:00 to 09:07- During the first 7 minutes of the pre-open session, traders have to place their buying and selling orders. During this time, they can change the orders. Traders can cancel the orders in these 7 minutes.
- 09:08 to 09:08- The order of shares can freeze anytime between 09:07 to 09:08. Once the order freezes, a trader cannot modify or cancel the order.
- 09:08 to 09:12- During this time, the order matching process is conducted. The system stops taking any orders and prepares the opening price of the share for the regular trading session. During this time, the buying and selling orders of shares are matched on the basis of market demand and supply.
- 09:12 to 09:15- This is the buffer time to complete the activities of the pre-open session before the regular session starts.
Price Equilibrium in NSE Pre-open Market
The opening price of shares for regular trading is determined on the basis of demand and supply of shares in pre-open hours. The price at which equilibrium is achieved becomes the opening price. The opening price is the one at which maximum trading is possible. This is the price at which maximum shares can be purchased or sold. But, if for a share maximum trading is possible at two prices then the price with minimum unmatched orders becomes the opening price. Similarly, if two prices have the same trading quantity and the same unmatched order then the price closest to the previous day’s closing price becomes the opening price for the day. But if there also the difference between the two prices are the same then that share is forwarded to normal trading hours at the previous day’s closing price.
Bottom Line
NSE pre-open session is very crucial for the market as it is responsible for stabilizing the market. Through the pre-open session, the actual demand and supply of stock can be ascertained and the market opens at the price determined by the actual demand and supply of shares. To place your order during the pre-open session, you can visit the 5paisa platform. It will help you with the required data and information for placing the order.
