What is Pre-Market Open Session in India? – Importance and Benefits

By Advisorymandi
26-October-2018 10:56:44 AM
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Everybody knows about the normal trading hours of the Indian stock market, which is between 9.15 AM to 3.30 PM. But do you know that there is also a pre-market open session also, which has also got a fair degree of importance? It is very interesting to know that some prominent trading activities also happen before the opening bell in the Indian stock market. It is worth exploring the concept of pre-market opening, so let’s get started.

 

Stock Market Timings in India

Before we proceed further, it is extremely important to get a brief overview of the different stock market timings in India.

Normal Trading Session

 

  • Its duration is between 9.15 AM to 3.30 PM.
  • It is a normal time where most of the trading takes place.
  • The shares are purchased and sold in this session.

 

Pre-Opening Session

Now comes the most important which many people may not know. This session starts between 9 AM to  9.15 AM. This session is further categorized into three sub-sessions, which are:

Post-Closing Session

  • Its duration is between 3:40 PM to 4:00 PM.
  • The orders for selling and buying shares can be placed in the post-closing session at the closing price. The order can also be termed as confirmed at the closing price if the buyers and sellers are available for trade

 

Who Can Trade in Pre-Opening Market Session in India?

It is imperative to note that trading in the pre-opening and post-closing session is only meant for the cash/margin/intraday segments. Future & options (F&O) segment is not allowed in the pre-open market session in India. The stop loss orders are strictly prohibited.

Need for Pre-Open Market Session in India

The concept of the pre-open market session in India was introduced in the year 2010 by two major stock exchanges Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The need to introduce the pre-open market was felt to minimize tremendous volatility that was evident in the first few minutes of the trade in the stock market.

Before the introduction of the pre-open session, any overnight events such as the change in the interest rates, delisting, debt-restructurings, election results, credit rating downgrade, new government policies, etc led to the volatility before the market opened.

 

Benefits of Pre-Open Market

There are some prominent benefits of the pre-open market session in India, which are as follows:

 

  • As you are getting ready to trade in the stock market, having a look at the pre-market opening session can give you a fair idea about the kind of shares moving in the market before the normal session begins.
  • The pre-market session gives an excellent idea about what is happening in the stock market at large. For instance, you can get a good idea about the major company news like the mergers, acquisitions, product launch, etc that might affect the share prices.
  • An investor can get valuable information about the major sectors or industries and most importantly quite easily decide about the specific shares to trade, which will be best for their investment portfolio.

 

Conclusion

Now that you have got a good knowledge about the pre-open market session in India, you can use it your advantage and make a strategic plan to trade better in the stock market. However, it also pays a great deal of importance to remain cautious and alert above every move or news that can have a major impact on the share price. So, again the first mover’s advantage with the pre-market open session.

 

Note: All information & data provided in this article is for the educational purpose as well as to give general information on the finance & economy, not to provide any professional advice or service. Views & opinions are not biased against the company and do not affect any official policy or any other agency, an organization within the content.

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Author: Advisorymandi

AdvisoryMandi is India's most trusted Stock Market Advisory marketplace covers NSE, BSE, MCX & NCDEX. Invest with confidence and harness the power of AdvisoryMandi to make smarter investment decisions in Stocks, Indices, Commodities, Forex & IPO.

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