NSE revises F&O trading hours from Aug 3; market close extended to 3:40 pm

According to an NSE circular, the normal market close time for equity derivatives will be extended to 3:40 pm from the current 3:30 pm, while the trade modification end time will remain unchanged at 4:15 pm.

The move is aimed at aligning derivatives trading with the newly introduced Closing Auction Session in the cash market, which will run from 3:15 pm to 3:35 pm and determine the official closing price of stocks.

Under the revised framework, F&O traders will have an additional 10 minutes after the start of the cash market's closing auction to hedge, adjust, or unwind positions based on evolving price discovery in the underlying securities.

The extension is expected to reduce uncertainty around end-of-day pricing and help traders better manage exposure linked to the final cash market close.

However, there will be no change in the pre-open session timings, pre-open close, or the normal market opening time for the derivatives segment.

NSE also said that the volume-weighted average price (VWAP) window used for close price computation in derivatives contracts will continue to be based on the last 30 minutes of trading but will now be calculated using trades executed between 3:10 pm and 3:40 pm, instead of the earlier 3:00 pm to 3:30 pm period.

In addition, NSE will broadcast alerts on its NEAT trading terminals at the commencement of the Closing Auction Session, informing members that the operating price range for stock futures contracts is being revised and that outstanding orders outside the revised range may be cancelled as per exchange rules.

The exchange stated that the changes will become effective from August 3 and members have been advised to update relevant contract files and trading applications before implementation. (ANI)