Sunday, October 17, 2010

Introduction of pre-open session - Effective 18th October 2010

This is with reference to the SEBI circular regarding introduction of Call Auction in pre-open session.

Starting from October 18, 2010, the exchanges shall accept orders in equity cash segment for selected scrips before markets open. This mechanism, known as Call Auction is introduced to smoothen the volatility in the stock prices due to overnight developments, if any. This will also help investors in the process of better price discovery.

The SEBI circular comes into effect from Monday, October 18, 2010, wherein selected NIFTY and SENSEX scrips will be available for order placement in pre-open session which will last for 15 minutes from 9.00 a.m. to 9.15 a.m. The orders you place would be accumulated for first 8 minutes of this session. Based on the maximum executable quantity the exchanges will determine the discovery price. Opening price determination, order matching and trade confirmation will happen in the next 4 minutes. The last 3 minutes would be for transition from pre-open to normal trading session.

Please click here to view the list of BSE and NSE scrips which are enabled for trading in pre-open session. For market orders (buy) placed in pre-open session, transaction value plus limits as per higher price band (20%) will be blocked in your account towards margin. Post execution of the trade, excess limits, if any will be released on a real time basis.

To simplify the entire circular for you, we have listed the changes which would come in effect for various segments:

For trading in Cash segment :

From 9.00 a.m. to 9.08 a.m. the exchanges will be open in pre-open session in
which you can place, modify or cancel an order for any scrip available for trading in this session

From 9.08 a.m. to 9.12 a.m. the exchanges will stop accepting orders and will calculate discovery price for the scrips. Also the trades for matching orders would be sent out by exchanges at discovery price during this time. All unexecuted market orders will be converted to limit orders at the discovery price and all unexecuted limit orders would remain at the limit price at which they were placed

From 9.12 a.m. to 9.15 a.m. will be the transition time from pre-open to normal market session. All unexecuted orders (limit & market) will be carried forward from pre-open to normal trading session

From 9.15 a.m. to 3.30 pm, the exchanges will be open for the normal trading session. Orders in all scrips and products can now be placed as per existing practice and matching will be done instantly

Features such as Stop Loss Price, Disclosed Quantity and IOC orders cannot be used when markets are in pre-open session. The respective NSE Circular is available here for your reference

For trading in Margin, MarginPlus and Derivatives:

You can place orders in Margin, MarginPlus, Futures and Options in the normal trading session which starts from 9.15 a.m.

Please note that there is no change in Currency Derivatives segment. Markets will be open for trading in Currency Derivatives at 9.00 a.m.
Source: icicidirect

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