NSE plans to extend trading hours for derivatives segment in a phased manner: Report

India’s largest bourse, the National Stock Exchange (NSE), is finalising its plans to extend the equity derivatives trading hours in a phased manner, with an aim to offer an opportunity to domestic traders to react to global events, a report said.

Also Read: NSE may extend F&O trading hours: Samir Arora, Vivek Bajaj, other experts share views

An evening session for equity derivatives trading between 6 pm and 9 pm is likely to be proposed by the stock exchange, an Economic Times report said, quoting multiple people with knowledge of the matter.

The market participants can continue trading futures and options (F&O) contracts in the evening session after the regular session which begins at 9:15 am and ends at 3:30 pm, the report said.

At a later stage, the NSE might also consider to extend the evening session till 11:30 pm, the report added, quoting one of the sources.

The bourse is considering to introduce products in the evening session in a phased manner and plans begin with index futures and options including Nifty 50 and Bank Nifty, the business daily report said. 

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After index options, the NSE could consider stock derivatives. The expiry days all and timings for all products will remain unchanged, it added.

Moreover, NSE proposes to treat the evening session as a separate session and to settle trades made during the evening session along with the next day’s regular session, the newspaper reported.

“Prima facie an average F&O trader, is less likely to warm up to the idea of the evening session as it eats into one’s personal time and space, which is essential for research and planning or more importantly time off the market for recharge and introspection. But the possibility that the evening session could attract a different breed of investors, should not be underestimated,” said Anand James, Chief Market Strategist at Geojit Financial Services.

Also, while large investors who need depth and tight spreads could wait for the regular session, those looking to react early to global news flow could be interested, despite the risk of potentially lower volumes, he added. 

The NSE has submitted its plan to the stock market regulator Securities and Exchange Board of India (SEBI) for approval.

Extension of trading hours is likely to help domestic traders and investors to react to global news events as the Indian stock market ends before the US markets open.

Sebi has already set up rules for bourses to keep futures and options (F&0) trading open until 11:55 pm and equity shares trading until 5 pm.

“Further, we have so far taken credit for the strength of our macros, which has helped our indices less troubled by global market volatility. In other words, the prospects of even the index derivatives matching US markets blow for blow looks low, and could be limited to some data releases like US non farm payrolls data or CPI/GDP numbers, while FOMC rate decisions which Indian markets are sensitive to are mostly announced quite late in the session,” James said.

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