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PRE-OPEN SESSION INTRODUCED IN EQUITY DERIVATIVES (F&O) SEGMENT

 

National Stock Exchange of India Limited (NSE) & Bombay Stock Exchange (BSE) have announced the introduction of Pre-Open Sessions in the Equity Derivatives (F&O) Segment starting December 8, 2025.

This move follows the directions issued by SEBI via its Circular dated May 29, 2025. You can alternatively refer our previous article on Measures for Enhancing Trading Convenience and Strengthening Risk Monitoring in Equity Derivatives for more detailed information.

Trading in the pre-open session for the F&O segment will commence from Monday, December 8, 2025.


Session Timings:

The pre-open session will be conducted using a call auction mechanism (a mechanism where buy and sell orders for a security will be collected over time and executed all at one price.) for a total duration of 15 minutes (9:00 AM – 9:15 AM), divided into three parts:

 

Session Time Description:

  1. Order Entry Period: 9:00 AM – 9:07/08 AM (Order entry, modification, and cancellation allowed). System-driven random closure between the 7th and 8th minute.
  2. Order Matching & Trade Confirmation Period: 9:08 AM – 9:12 AM (Order matching, opening price determination, and trade confirmation).
  3. Buffer Period: 9:12 AM – 9:15 AM (Transition to the normal continuous trading session where Order addition/modification/cancellation shall not be allowed).

 

Eligible Contracts:

  1. The pre-open session will apply to current-month futures contracts on both Single Stocks and Indices.
  2. The session will also extend to the next-month futures contracts during the last five trading days before the expiry of the current-month futures.
 

The pre-open session will not apply to:

  • Calendar spread futures and option contracts on stocks or indices
  • Futures of an underlying security on its ex-date of corporate action (e.g., merger, demerger, etc.)
  • The facility will not apply to far-month expiry contracts.
 

Market Parameters:

Lot size, tick size & price band to remain same as Normal market while the Book type for pre-open is mentioned as “PO”.


Trading Session Structure:

 1. Order Collection Period:

  • Orders can be entered, modified, or cancelled.
  • Both Limit and Market orders are allowed.
  • Stop loss and IOC (Immediate or Cancel) orders are not permitted.
  • Indicative equilibrium price/opening price of contract, total buy/sell quantity, and percentage change from the previous close will be disseminated during pre-open session.
 

 2. Order Matching Period:

  • Orders are matched at a single equilibrium price that becomes the Opening price.
  • Matching sequence:
    • Eligible Limit orders with eligible limit orders
    • Residual eligible limit orders with market orders
    • Residual market orders with residual market orders
 

If none of the orders get matched and no price is discovered in a contract, the price of the first trade in continuous trading session will be the market opening price of that contract.

Order modification or order cancellation, trade modification and trade cancellation are not allowed during the matching period.

 

Equilibrium / Opening Price Determination:

  • The opening price is determined based on the principle of demand-supply mechanism.
  • The equilibrium price is where maximum executable volume occurs.
  • Key rules include:
    • The price with the maximum executable volume will be considered the equilibrium price.
    • If multiple prices qualify, the one with minimum order imbalance is chosen.
    • If no equilibrium price is discovered, the first trade price in the normal market becomes the opening price.
    • In case only market orders exist on both sides, the base price will be taken as the opening price.


Unmatched order:

All unmatched limit orders from the pre-open session will move to the normal market with their original time stamp, while unmatched market orders will convert into limit orders at the equilibrium price.


Risk Management:

  • All orders in the pre-open session will undergo margin validation to ensure sufficient available capital.
  • Orders not backed by adequate margin will be rejected.


Pre-Trade Risk Controls:

The following are the applicable & non-applicable risk controls during pre-open:

Controls that are Applicable:

Self-Trade Prevention (STPC):

The STPC mechanism will apply to pre-open sessions. Self-Trade Prevention is a mechanism to prevent users from inadvertently trading against themselves. STPC mechanism will be active during the order entry/collection period of the pre-open session. If a potential self-trade is detected, the active order will be cancelled by default, regardless of the STPC option set in the order.

 

Controls that are Not Applicable:

    1. For NSE - Market Price Protection (MPP) for index futures contracts.
    2. For BSE - MPI (Market Price Impact), LPP (Limit Price Protection), PRC (Price Reasonability Check) and RTPC (Reversal Trade Prevention Check) mechanisms.
    3. Cancel on Logout (COL), Kill Switch (Trading member level and User level) facility shall not be applicable for orders entered in pre-open session in equity derivatives segment.
 

Market Price Protection (MPP) and Limit Price Protection (LPP) will use equilibrium (Opening) price from pre-open as reference, once normal market opens.

 

Data Dissemination:

Indicative Equilibrium Price and Quantity will be displayed on the NSE & BSE websites during the pre-open session.

 

Reference Documents:

 

 

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