The move is aimed at enhancing price discovery and ensuring smoother market opening in F&O contracts.
However, it should be noted that the pre-open session is applicable for both single stocks and index futures in the equity derivatives market.
The pre-open session will operate from 9:00 AM to 9:15 AM and will follow a call auction mechanism. This 15-minute session will be split into three components:
- Order Entry Period (9:00 AM – 9:08 AM): During this window, traders can place, modify, or cancel orders. The system will randomly close this phase between the 7th and 8th minute. Notably, the pre-open sessions for equity and equity derivatives will operate independently.
- Order Matching & Trade Confirmation (9:08 AM – 9:12 AM): The system will determine the opening price based on the equilibrium price and match orders accordingly. No new orders or modifications will be allowed during this period.
- Buffer Period (9:12 AM – 9:15 AM): This short transition period bridges the pre-open session and continuous trading hours.
The pre-open session will be applicable to current-month futures contracts on both single stocks and indices. Additionally, during the final five trading days before the expiry of the current-month contracts, the session will also apply to next-month futures.
The system will not support pre-open for far-month (M3) expiry contracts, spread and option contracts, or futures on ex-dates due to corporate actions.For instance, for contracts expiring on 30 December 2025 (M1), the pre-open session will apply from December 1 through expiry day. From December 23 to 30, the session will also extend to contracts expiring in January 2026 (M2), excluding holidays.The market parameters for the pre-open derivative segment mirror those of the normal market, including tick size, lot size, and price bands.
During the Order Collection Period, both market and limit orders can be placed, excluding special terms like stop-loss and IOC. Indicative prices, equilibrium data, and demand-supply statistics will be available to participants in real-time.
In the Order Matching Period, the system will determine a single equilibrium price and match orders based on a defined sequence—limit with limit, remaining limit with market, and market with market. No modifications or cancellations are permitted once this phase begins.
This structured approach is expected to enhance liquidity, improve price transparency, and reduce volatility at market open in the F&O segment.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)