25-Sep-2023
2 mins read
The National Stock Exchange (NSE), one of India’s largest and most recognized stock exchanges, is set to rewrite its trading hours, providing an extended window for equity derivatives. This change, primarily driven by the aim to align with global markets and retain large traders, will undeniably transform the face of Indian trading.
Extended Hours
As per recent reports from the Economic Times, NSE is looking to introduce an evening trading session dedicated to futures and options contracts. This session will start after the traditional trading hours, commencing from 6 pm and going on till 9 pm. Interestingly, insiders hint at a potential extension, with trading hours possibly reaching 11:30 pm.
Catching up with Global Events
The key reason behind this novel step? Global events. By providing traders with extended hours, the NSE ensures that Indian traders can swiftly respond to global market shifts, developments, and key events. This is a strategic move to keep Indian traders on the frontline, offering them a competitive edge in the global market.
The trading world is vast, with exchanges like GIFT City luring traders with round-the-clock trading. By extending trading hours, NSE is not just offering added convenience but is also ensuring that it retains significant market players, including hedge funds and proprietary desks.
Equity Derivatives vs Cash Equities
The proposal, as mentioned by Sriram Krishnan, the Chief Business Development Officer at NSE, seems to favour equity derivatives over cash equities. He stated, “There is a bit of hesitancy when it comes to extending trading hours of cash equities. But on equity derivatives, there was a large consensus.”
Green Light from SEBI
NSE has done its part by submitting the proposal to SEBI (Securities and Exchange Board of India). The current anticipation lies in the market regulator’s decision. As of now, SEBI has provisions for futures and options trading until 11:55 pm and shares trading up to 5 pm.
Phased Introduction
In its strategic approach, NSE is looking at a phased introduction of products in this extended trading window. Initiating with index futures and options, which include the likes of Nifty and Bank Nifty, there is a plan on the horizon to later incorporate stock derivatives.
Conclusion
NSE’s intention of extending trading hours can reshape India’s trading patterns, bridging the gap with global markets. Whether it’s the timeline extension or the addition of more products during the 6-9 pm window, the Indian trading community waits in anticipation for the next big move.