The Indian stock market offers a wide range of trading options, making it a dynamic and diverse platform. With numerous transactions occurring daily, traders have a variety of opportunities to explore. While the market officially opens at 9:00 AM, there is a crucial 15-minute window before trading begins, known as the pre open market session. This brief period is essential for traders to assess their positions and make informed decisions.
Let's understand what these 15 minutes are all about in the Indian stock market.
The pre opening market session is from 9:00 AM to 9:15 AM, before the official trading hours commence. During this time, traders and investors have the opportunity to evaluate market sentiment, place orders, and make necessary adjustments to their portfolios.
The session plays a significant role in determining the opening prices of shares listed in the Indian stock market. Various factors, including news, global market trends, and overall investor sentiment, generally influence them.
The pre opening market session of share trading in India is divided into three distinct phases, each serving a specific purpose in the trading process. Understanding these phases can help investors navigate the market more effectively. Here’s a brief of what this session looks like:
The pre opening market session is divided into three distinct phases, where the first phase lasts for eight minutes beginning from 9:00 AM. It is simply known as the order collection period. During this time, traders and investors can place orders for buying and selling shares. However, no orders are matched during this period. Instead, the exchange collects all the buy and sell orders for each stock.
Following the order collection period, the order matching period takes place from 9:08 AM to 9:12 AM. During this time, the Indian stock market exchange matches the buy and sell orders based on their prices. This process determines the opening price for each stock using a method called the "equilibrium price," which ensures that the maximum number of shares are traded at the opening.
The last phase of the pre-open market session is the buffer period, which lasts from 9:12 AM to 9:15 AM. During this time, the exchange finalizes the opening prices and prepares for the transition to regular trading hours. No new orders can be placed during this period, and the market remains in a state of preparation for the day's trading activities.
Anyone who participates in share trading in India can take part in the pre-open market session. This includes retail investors, institutional investors, and traders. The session is especially beneficial for those who want to make early adjustments to their portfolios based on overnight news or global market trends. It's also a valuable time for investors looking to secure an advantageous position in the market before regular trading begins.
The pre-open market session in the Indian stock market is a valuable tool for traders and investors. It provides an opportunity to assess market conditions, place orders, and prepare for the day's trading activities. Once you're aware of the market pre-opening session's meaning, you can understand how it works and utilise effective strategies. This helps investors minimise risks and maximise gains.
Whether you’re new to share trading in India or an experienced trader, a financial advisor can help you understand this session better and earn more effectively.
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