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The National Stock Exchange (NSE) on Tuesday, November 4, announced that it will introduce a pre-open session in the futures and options (F&O) segment starting December 8, 2025. The move, aimed at improving market efficiency, is expected to help in better price discovery and reduce volatility at the start of trading hours.

According to the NSE circular, the pre-open session will run from 9:00 AM to 9:15 AM, similar to the existing system in the equity cash segment. The session will use a call auction mechanism that allows the collection and matching of orders before regular trading begins.

The pre-open session will have two phases:

Order collection period (9:00 AM – 9:08 AM): Traders can place, modify, or cancel orders.

Order matching period (up to 9:15 AM): Orders are matched based on price and time priority.

Unmatched orders will automatically be carried forward to the main trading session, which starts at 9:15 AM.

Currently, this mechanism is used only in the equity segment. Extending it to derivatives will help reduce sudden price swings and provide traders with more accurate opening prices.

Earlier in August, the Bombay Stock Exchange (BSE) had also announced plans to introduce a pre-open session for index and stock futures in the equity derivatives segment from December 8, 2025. This will ensure synchronization between the two leading exchanges and promote smoother trading across platforms.

For traders, especially those active in futures and options, the pre-open session will:

- Help discover fair opening prices by balancing demand and supply before trading begins.

- Reduce opening volatility, particularly after overnight news or global market movements.

- Provide an additional window for order management, improving overall market liquidity.

Abhay Shukla is a Senior Sub-Editor at Zee Business, where he covers the stock markets, corporate news, personal finance, technology, and auto sectors.

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