National Stock Exchange on Tuesday announced extension of trading hours for interest rate derivatives to 5 pm effective February 23.
"To converge with underlying market timings, members are requested changes in trading timings of Interest Rate Derivative contracts," said the stock exchagne in a statement.
Contracts for the expiry month February 2023 will be available for trading till 5 pm on expiry day i.e. February 23, 2023. There shall be no change in trading hours for other interest rate derivative contracts.
All existing expiry contracts with expiry day beyond February 23, 2023 and all new expiration contracts introduced thereafter shall be made available for trading till 5 pm on expiry day.
"There shall be no change in CP Code modification/ Give up timings and same will continue till 5:30 pm. There shall be no change in Final Settlement Price computation mechanism i.e. it will be calculated based on last 2 hours of VWAP of NDS OM trades subject to minimum of 5 trades," added NSE.
Currently, the domestic indices are open between 9:15 am and 3:30 pm. Markets which have longer trading hours tend to be better able to hedge the risk arising due to global information flow.
Zerodha CEO Nithin Kamath on Monday opined that extension of trading hours could "potentially lead to lower participation and liquidity in the longer run".
"I'm unsure how it will affect the mental health of active retail F&O traders in the long term. Tracking P&L (profit and loss) for long hours is stressful & can affect life outside trading. While it could boost revenues for the capital markets business in the short term, I'm unsure if retail investors will end up doing better. This could then potentially lead to lower participation and liquidity in the longer run, which will affect everyone," Kamath stated in a series of tweets.
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