NSE PRE OPEN MARKET
The NSE pre open sessions are 15 minutes in duration, which is from 9:00 am to 9:15 am. This particular session contains the order matching period and order collection period. The price band, which is applicable, will stay the same as the normal market.
The NSE pre open session’s order collection period is 8 minutes. It’s provided for cancellation, modification, and entry. During this particular period, all the orders can get cancelled, modified, and entered.
|Asset Type||Name||LTP||Change||% Change|
|WorldIndex America||S&P 500||4267.52||-16.33||-0.38|
|Commodity Spot||Crude oil||4386||0.00||0.00|
Information, such as the opening price of scrip/indicative equilibrium, sell quantity, and total buy of the scrip, gets disseminated to the members on the NEAT+ Terminal in real time.
The % change of indicative equilibrium prices to the past close price and the NIFTY index value gets computed according to the orders in the order book. After that, these orders get disseminated during the NSE pre open session.
The matching period for the orders begins instantly after the completion of the order collection period. All the orders are matched with a single price, which becomes the “open price”: The NSE pre open order matching occurs in this sequence:
● Market orders get matched with market orders
● Residual-qualified boundary orders get matched with the market orders
● Qualified limit orders get matched with all the eligible limit orders
Equilibrium Price Determination
Let’s assume that the NSE pre order session got bids for a specific stock “XYZ” for various prices between 9:00 am to 9:15 am. According to the primary request supply mechanism, the exchange will come at a single or equilibrium price.
This is a price at which all the extreme amounts of stocks are easily sold or bought. Trade cancellation, trade modification, order cancellation, and order modification are not permitted during the time of order matching. Right before the commencement of the NSE pre open market, the trade confirmation gets distributed to the members through the trading terminals.
There is also a silence time along with a conclusion for order matching to allow the transition to the normal market from the pre-open session. All the outstanding orders get transferred to a normal market while it preserves the actual time stamp.
All the limit orders get placed for a limit price, and the market orders get placed for the open balance price. When there is no presence of the equilibrium price, the NSE pre open market will shift all the orders to the standard market. Here, orders get priced based on the modified closing price or the base price.
The Normal Market opens up for trading work at 9:15 am, along with the closing of the pre-open session. Block trading is available for 35 minutes once the normal market opens up. The opening price is determined with the help of the demand-supply method.
The equilibrium price is known as the “cost of executing” the extreme volume. When more than a single price fits into these conditions, the equilibrium price becomes the price under which all the minimum amounts of incompatible orders are placed.
But when many of the prices have the same minimum order unmatched quantity, the equilibrium price becomes the closing price of the previous day. During the time of corporate action, the previous day’s closing gets adjusted to the base price.
The NSE pre market and limit orders are considered after the equilibrium price gets calculated. Furthermore, the equilibrium price, which was set during the pre-open session, is utilized as the open price for the day.
When both the selling and buying sides only have the market orders, the orders get matched with the close price of the previous day. So, the opening price becomes the modified close price or close price of the previous day.
But in the pre-open session, when no price is discovered, the cost of the 1st trade within the standard market transforms into the open price. Be sure to check the information on the NSE pre open sessions to gain more information on them. You will get information on the official site of NSE.