The National Stock Exchange or NSE has extended the trading hours for interest rate derivatives by an hour and a half starting Feb 23, 2023.
Until the said date, the window for trading in interest rate derivatives was until 3:30 pm starting from 9 am.
However, the domestic exchange has acted upon its decision of extending the time for trading in interest rate derivatives until 5 pm, which means the window is now extended for 6.5 hours, from 9 am to 5 pm.
The decision to extend the timing is taken in order to converge the trading hours with the underlying market timings, stated the stock exchange NSE.
“There shall be no change in trading hours for other interest rate derivative contracts,” the exchange has clarified in a notice.
As mentioned above, only those contracts which have their expiry lined up in the current month of February 2023 will be available for trading until 5 in the evening on the day of expiry, which is Feb 23, 2023.
All the other existing expiry contracts having expiry days beyond February 23, along with all the new expiration contracts introduced after this will lie under the ambit of extending the trading hours until 5 pm on the expiry day.
According to NSE, even though the trading time for the aforementioned derivatives are getting extended, there will be no change in the final settlement price computation mechanism.
It will continue to be calculated on the basis of the last 2 hours of VWAP of NDS OM trades subject to a minimum of 5 trades, the exchange added.
“I’m unsure how it will affect the mental health of active retail F&O traders in the long term. Tracking P&L (profit and loss) for long hours is stressful & can affect life outside trading. While it could boost revenues for the capital markets business in the short term, I’m unsure if retail investors will end up doing better. This could then potentially lead to lower participation and liquidity in the longer run, which will affect everyone,” said the CEO of leading brokerage Zerodha, Nithin Kamath.
