The National Stock Exchange (NSE) is reportedly planning to implement extended trading hours for equity derivatives, as revealed by new reports.
The proposed initiative involves introducing an evening trading session from 6 pm to 9 pm, enabling market participants to engage in futures and options contracts beyond the standard trading hours of 9:15 am to 3:30 pm. There’s also speculation that the NSE might extend this session up to 11:30 pm, based on an unnamed source cited in the report.
National Stock Exchange To Extend Trading Hours
The primary objective behind these extended trading hours is to provide Indian traders with an opportunity to promptly respond to global events. It is anticipated that longer trading sessions will augment trading volumes on the exchange, addressing concerns about significant traders, including proprietary desks and hedge funds, migrating to competitors like GIFT City, where trading occurs round the clock.
Sriram Krishnan, Chief Business Development Officer at NSE, discussed the potential hesitancy in extending trading hours for cash equities but noted a widespread consensus regarding equity derivatives.
The NSE has already submitted its proposal to the market regulator, the Securities and Exchange Board of India (SEBI), and is awaiting approval. Notably, SEBI has established rules allowing exchanges to maintain futures and options (F&O) trading open until 11:55 pm and shares until 5 pm.
What Will Initial Session Offer?
The initial evening session from 6 pm to 9 pm will exclusively offer index options and futures, with plans to potentially include single stock options and futures later on. The NSE is planning a phased introduction of products during the extended trading hours, commencing with index futures and options like Nifty and Bank Nifty, followed by the inclusion of stock derivatives. The expiry dates and timings for all products will remain consistent.
Krishnan also highlighted the possibility of further expanding the timeline from 9 pm to 11.55 pm or introducing more products within the 6-9 pm session in the future.
However, some market participants, including prominent brokers, have expressed skepticism regarding NSE’s decision to extend trading hours. They argue that elongating trading hours may not necessarily boost trading volumes and could instead escalate costs and dissatisfaction among employees.
