SEBI changed trading time from 9 am to 11:55 pm from 1st October only for Equity Derivatives

  • The National Stock Market has written to capital and commodity market regulator SEBI, seeking approval to extend the time of equity derivatives trading till nearly midnight.
  • The NSE, India’s top stock exchange, is looking to start a second trading session between 5:00 pm and 11:55 pm, only for equity derivatives, after the regular session ends at 3:30 pm
  • It is not clear whether trading will be held in single-stock derivatives or only index derivatives in the absence of a cash market during the second session.
  • In May 2018, SEBI had allowed stock exchanges to hold trading in derivatives between 9 am and 11.55 pm.
  • The other major exchange, BSE has not been known to have applied for an extension in trading times, even though both exchanges tend to align their trading sessions with each other.
  • Currently, commodities exchanges such as MCX and MCDX conduct trading in derivatives of some Agri and non-Agri commodities.
  • Brokers say they would resist any move to keep trading open till midnight, as they do not see enough business post regular trading hours to compensate for the additional operating costs they will have to incur.
  • Plus there are also concerns on how effectively an equity derivatives market will work in the absence of a functioning cash market.
  • Many trades, such as hedging or arbitrage, require traders to initiate positions in both the cash and derivatives market.
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