NSE proposes evening trading session for equity derivatives
The National Stock Exchange (NSE) is seeking approval from the Securities and Exchange Board of India (SEBI) to introduce extended trading hours for equity derivatives. The proposal includes an evening trading session from 6:00pm to 9:00pm, allowing market participants to trade futures and options (F&O) contracts after regular trading hours of 9:15am to 3:30pm. The move aims to enable traders to react faster to global events and potentially enhance the exchange's trading volumes.
Initial focus on index futures and options
The proposed extended trading hours will initially cover index futures and options, including Nifty and Bank Nifty, with plans to later include stock derivatives. Expiry days and timings for all products, however, will remain unchanged. The extended session is expected to provide traders with increased opportunities to react to global events and boost trading volumes. However, some market participants argue that longer trading hours may not necessarily lead to higher trading volumes.
Concerns over longer trading hours
Despite the potential benefits of longer trading hours, concerns have been raised about the possible drawbacks. These include higher operational costs, employee discontent, and negative impacts on work-life balance. Some leading brokers and market participants question the rationale behind the NSE's decision to roll out evening trading, as they believe it may not significantly improve trading volume.
Awaiting SEBI approval for extended sessions
The NSE's proposal for extended trading hours is currently awaiting approval from market regulator SEBI. SEBI has already established rules allowing F&O trading to remain open until 11:55pm and shares until 5:00pm. If approved, the NSE plans a phased introduction of products in the extended trading hour, starting with index F&O, followed by stock derivatives at a later stage.
