NSE rolls out pre-open session for equity derivatives from December 8: Key things to know

National Stock Exchange of India (NSE) has rolled out a pre-open trading session for equity derivatives (F&O) from December 8, creating a structured call auction window to stabilise market openings and enhance price discovery in futures contracts. The new mechanism standardises how opening prices are established, aiming to reduce volatility and bring greater order to early-session trading.

The new pre-open session runs daily from 9:00 am to 9:15 am and applies to current-month single-stock futures and index futures. During the last five trading days before contract expiry, the mechanism will also cover next-month futures contracts.

The session operates through a call auction mechanism and is divided into three phases:

Order Entry Period (9:00 am–9:08 am): Market participants can place, modify or cancel orders. The system randomly closes order entry between the seventh and eighth minute.

Order Matching and Trade Confirmation (9:08 am–9:12 am): Orders are matched at the equilibrium price determined by the system. No new orders, cancellations or modifications are permitted in this phase.

Buffer Period (9:12 am–9:15 am): This phase acts as a transition window between the pre-open session and the start of regular market trading.

The pre-open session is not available for far-month futures, spread contracts, options contracts or contracts falling on corporate action ex-dates.

Trading parameters during the session mirror the normal market setup, including tick size, lot size and price bands. Participants can place market and limit orders, while stop-loss and IOC (immediate-or-cancel) orders are not permitted.

Real-time information such as indicative prices and demand–supply data is made available during the session. The order-matching process follows a hierarchy of limit orders matched with limit orders, followed by remaining limit orders matched with market orders and finally market orders matched with market orders. Once the matching phase begins, order modifications or cancellations are not allowed.

According to earlier communication from the exchange, the initiative is aimed at bringing greater structure to opening price formation and improving trading discipline in the equity derivatives segment. From December 8, traders and market participants begin operating under this new pre-open framework for equity derivatives on the exchange.