NSE announces pre-open session for F&O segment
What's the story
The National Stock Exchange (NSE) has announced the launch of a pre-open session for its equity derivatives (F&O) segment, starting December 8, 2025. The new trading mechanism is aimed at improving price discovery and facilitating smoother market openings for F&O contracts. The pre-open session will be applicable to both single shares and indices futures in the equity derivatives market. It will run from 9:00am to 9:15am using a call auction mechanism.
Trading details
Pre-open session divided into 3 parts
The session will be divided into three parts. First is the Order Entry Period (9:00am-9:08am) where traders can place, modify, or cancel orders. Second is the Order Matching and Trade Confirmation period (9:08am-9:12am) when the system determines opening prices based on equilibrium price and matches orders accordingly. Finally, there's a Buffer Period (9:12am-9:15am) transitioning into continuous trading hours.
Trading rules
Applicability of pre-open session
The pre-open session shall apply to current-month futures contracts on single stocks and indices. In the last five trading days before expiry, it will also apply to the next-month futures contracts. However, it won't apply to far month (M3) expiry contracts, spread and option contracts on the indices and stocks, or futures on ex-dates due to corporate actions. The market parameters for this segment are akin to those of normal market, including tick size, lot size, price bands, etc.
Operational phases
Two main phases in the session
The pre-open session consists of two main phases - the Order Collection Period and the Order Matching Period. During the first, traders can place, modify, or cancel orders with both limit and market orders being allowed. However, special term orders like stop-loss are not permitted. In real-time, indicative prices, equilibrium price data, and the demand-supply statistics will be disseminated to participants.
Matching process
A look at Order Matching Period
In the Order Matching Period, the system matches orders at a single equilibrium price, which becomes the open price. The matching happens in a defined sequence, limit with limit, residual limit with the market, and market with market. Once this phase starts, trade modifications and terminations aren't allowed. All orders received during this session are validated against the applicable margins for sufficiency of available capital before being accepted.