Skip to main content

Market Pre-open session - How It works and Its benefits

   With an intention to reduce volatility in various scrips at the opening of the markets, and to arrive at the ideal opening price of a scrip, the exchanges have introduced a call auction process in the pre-open session from October 18.

   The pre-open session is a new innovation to arrive at the ideal opening price of a scrip for the current trading session. The session intends to reduce volatility in the beginning of a day. Under this new arrangement, an exchange will collect orders for the first few minutes of this session. On the basis of orders received, it will arrive at the opening price and match the tradable orders to that price. The remaining orders will be moved to the normal trading session.

   The call auction process will be initially introduced for scrips forming part of Nifty and Sensex, and trading in other scrips and F&O contracts will only begin at 9:15 am when normal market trading begins. Orders not will get traded during the order entry period in the pre-open session.

   The duration of the pre-open session will be 15 minutes - from 9 am to 9.15 am.

   The session will have three phases:

Order entry period    

The order entry period is 9 am to 9.08 am. The buyer can place new orders, modify or delete old orders. The order entry can stop randomly between the 7th and 8th minute.

Order matching and confirmation period (price discovery period)    

This period is from 9.08 am to 9.12 am. The exchange arrives at the opening price and trades the matchable orders at the opening price. The client cannot modify or delete the orders during this period.

Buffer period    

This is from 9.12 am to 9.15 am. This period is used as a transition period between pre-open and continuous trading sessions.

   Then the regular market - 9.15 am to 3:30 pm - hours begin.

Trading    

The orders that have not been traded are carried forwarded to the normal trading session. Limit orders that are not traded during pre-open sessions will be moved to normal trading sessions at the same price. Market orders that are not traded during pre-open sessions will be moved to normal trading sessions at the opening price.

   Orders are traded in the second phase - order matching and confirmation phase - of the pre-open session. You will receive trade confirmations during that phase only - tentatively between 9.08 and 9.12 am.

   If the opening price is not discovered during a pre-open session, the market orders will be shifted to the normal trading session at the previous day's closing price.

   Presently, you can only place orders in scrips that form the Nifty and Sensex indices. This list is subject to change and will be notified by exchanges accordingly. You can place an order in any product (cash, intraday or margin) during a pre-open session. Pre-open session is not available in the F&O segment. You cannot place fresh offline orders or modify existing offline orders during a pre-open session.

   Also, you cannot place an order beyond plus or minus 20 percent of the previous day's closing price. For example, if the closing price of a scrip is Rs 200, you cannot place an order beyond Rs 160-240 price range during a pre-open session.

   You may view the tentative opening price for a scrip in the 'LTP' field during a pre-open session.

Order books    

For pre-open sessions, the order book of a scrip in the NSE and BSE need to be interpreted differently.

In the NSE    

The NSE order book will have four limit order legs and one market order leg on both bid and offer sides. The last leg of the order book on either side will be for market orders. All the market orders placed by you will come under this leg.

   Each limit order leg will show the exact price and quantity available on that price. For market order leg, the order book will display price as '0' and quantity as total quantity of the market orders on that side.

In the BSE    

The BSE order book will have all limit order legs and each leg will display the cumulative tradable quantity at that leg.


   Market orders will not be treated separately in the order book.

 


Popular posts from this blog

Jeevan Labh

 The Life Insurance Corporation of India has announced Jeevan Labh , its limited-premium, with-profits endowment plan .   It comes with a premium paying terms of 10, 15 and 16 years for corresponding policy tenures of 16, 21, and 25 years respectively. ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further information contact Prajna Capital on 94 83...

Liquidity Adjustment Facility

Liquidity adjustment facility (LAF) is a money market tool used by the central bank of a country (in India it is the Reserve Bank of India ), to infuse funds into the country's banking system when liquidity dries up. Again, in case there is excess liquidity, the central bank uses some tools to help banks manage their surplus liquidity. Usually the RBI uses the repurchase facility (called Repo ) to give short-term loans to banks to meet their temporary liquidity shortage. On the other, hand RBI uses reverse repo facility to help banks park their excess liquidity with it. Banks usually use various securities, which are approved by the RBI, as collateral when they take money from the RBI to meet their short term liquidity requirement     Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara...

NPS for Tax Saving

The NPS is a great way to save tax if you don't mind locking in your money till you retire. Till last year, the taxability of the NPS was a big issue. But last year's Budget changed the rules and made 40% of the corpus tax free. The PFRDA wants that the balance 60% to be exempt from tax as well. The emphasis is on increasing pension coverage. So, allowing EEE status (to NPS ) is our major demand (in the Budget NPS is especially useful for investors who may have exhausted the `1.5 lakh investment limit under Section 80C but want to save more.   Another way the NPS can cut tax is by rejigging the salary.If a company deposits up to 10% of the basic salary of an employee in the NPS under Section 80CCD(2d), the amount will be tax free. Turn to page 28 to see how much tax this can save. However, the take-home pay of the employee will come down. Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax...

BHIM App

What is BHIM? BHIM stands for Bharat Interface for Money , which is an easy way of transferring money from one bank account to an other via a smartphone using the Unified Payments Interface (UPI) platform . It is an instant payments application meant for sending money as well as requesting for payments. How is it different from UPI? BHIM is no different than UPI. But in the case of BHIM, customers don't have to download mobile applications of multiple banks, instead a single BHIM app downloaded from Android Play Store is sufficient. Other than that, payments can be made through a virtual payments ID or through account number and IFS code, same as UPI. What you need to use BHIM? BHIM can be used across an droid smartphones with version 4.0 and above, also it will be made available on iPhones and Windows smartphones very soon. Further, for feature phone users they need to use the USSD feature by dial ing *99#. Why was the need for BHIM felt when UPI is already in place? With various...

General insurance

  General insurance has evolved to become as important as life insurance. A look at some categories which can no longer be over-looked…    Insuring your belongings can help you cushion yourself against financial losses. While life insurance takes care of your loved ones, it is equally important to safeguard your treasured possessions. Here's a quick look at the 'must-haves' under general insurance…     Travel insurance Accidents can happen anytime – worse if they happen when you are in a foreign land. You may get sick and meeting your medical bills in a foreign currency can be quite frustrating! Besides, there may be other tricky situations such as accidents, loss of baggage or passport, trip cancellation, flight delays, plane hijack, etc. Whether you travel for leisure, business or studies, travel insurance comes handy to safeguard your trip against contingencies and that too, at a fraction of the cost of your trip.     Home insurance For most of us, the home is the...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now