Investment and trading in shares have always attracted millions due to the potential for higher returns and flexibility of investment. However, it has gained a lot of momentum in the recent past. As per the official statistics, there has been an increase of approximately 10.7 million accounts in the post-pandemic period of 2020. This has shown a tremendous shift in the mentality of the average Indian investors and their risk-taking ability.
These new investors have to understand the basics of investment and trading in the stock market to ensure that they can understand its workings and maximize their profits. The stock market timings are part of the basics of trading and investment in share markets. Given below are a few details of the same.
The share market timings can be broadly classified under three main categories namely the pre-opening session, the normal trading session, and the closing session. The details of these sessions are mentioned below.
1. Pre-opening session
The pre-opening session marks the start of the trading day. This session is further split into three trading sections.
- Section 1
Section 1 is the first part of the trading session. It is from the start of the trading session and for a period of 8 minutes i.e., between 9.00 am and 9.08 am. During these 8 minutes, investors and traders can place new orders of buying and selling securities as well as modify or cancel them. When the normal trading session begins at 9.15 am, these orders are given priority in execution.
- Section 2
This is the second part of the pre-opening session and is applicable for a period of 4 minutes from 9.08 am to 9.12 am. During this session, price matching is undertaken which is essentially a comparison of demand and supply of securities. This action is important to determine the prices of the securities in the normal trading session that starts at 9.15 am.
- Section 3
The final section of the pre-opening session is of 3 minutes from 9.12 am to 9.15 am which essentially acts as a buffer between the pre-opening session and the normal trading session and eases the transition to the latter. Traders and investors are not allowed to place, modify or cancel any orders.
2. Normal session
The normal trading session is the continuous trading session that begins from 9.15 am to 3.30 pm During this session, traders and investors can freely trade and invest in securities as well as modify or cancel their orders without any restrictions or limitations. The stock exchanges follow the bilateral matching principle during this session where every buy order is matched with a sale order at the same corresponding price level. The transactions in the normal trading session are executed as per the time and price priority.
3. Closing session
This is the final trading session after the completion of the normal trading session at 3.30 pm. This session is split into two sections and the details of the same are mentioned hereunder.
- Section 1
The first section of the closing session or the closing price calculation session is of a duration of 10 minutes from 3.30 pm to 3.40 pm. During this section, the closing prices of the securities are calculated based on the weighted average prices of the stocks or indices like Nifty and Sensex that are traded in the last half hour of the normal trading session i.e., between 3 pm to 3.30 pm.
- Section 2
This section is also known as the post-closing session and is for the duration of 20 minutes from 3.340 pm to 4 pm. During this section, the traders or investors can place buy or sell orders but it will be confirmed only if there are sufficient present in the market. The bids placed during this section can result in capital gains if the opening price for the next trading session is higher. If however, the opening price of the next trading session is lower than the closing price of the bids, traders and investors can cancel their orders in the first section of the pre-opening session of the following trading day i.e., between 9 am to 9.08 am.
Apart from the above routine share market timings, there are also special trading sessions where traders and investors can place their orders.
1. After Market Orders (AMO)
This is a special trading session after the closure of all the sessions of the normal trading day. This session is from 4.30 pm in the same trading up to 8.50 am the following day. This session is useful for traders and investors who are unable to monitor the usual day’s trade from the pre-opening session to the closing session.
2. Mahurat Trading
Mahurat trading or ‘Samvat Trading’ is another special trading session that is conducted on the day of Diwali. On this day the normal trading sessions of the stock markets are suspended as it is a public holiday. This session is conducted as it is considered auspicious to buy or purchase new investments on the day of Diwali. The timing of trading is not fixed as it depends on the auspicious mahurat on that day and is between 5.30 pm to 6.40 pm.
An average person may consider the trading between 9 am to 3.30 pm to be the normal trading period for any session. However, traders and investors of the share market are aware of the various trading sessions during the day and their implications. It is the basic knowledge that needs to be understood by the traders and investors to effectively make their transactions and also avoid any losses.
No. Pre-opening and post-closing sessions are applicable for cash markets only and not for F&O trading.
The share market timings for currency derivative trading are from 9 am to 5 pm on a normal trading session.
The trade timings for MCX are dual which is according to the daylight savings time in North America. For months April to October, the trading sessions are from 10 am to 11.30 pm. During the months from November to March, the trading session is from 10 am to 11.55 pm. Also, on Saturdays, the trading session is from 10 am to 2 pm.
No. Trading is suspended during the holidays as per the list declared by the stock exchanges. Hence, the usual share market timings are not applicable.