NSE set to extend F&O trading hours in a phased manner; awaits SEBI's nod

The National Stock Exchange (NSE) is reportedly planning to introduce extended trading hours for equity derivatives, as per an Economic Times report. The NSE is considering an evening trading session from 6 pm to 9 pm, allowing market participants to trade futures and options contracts after the regular trading hours from 9:15 am to 3:30 pm. There's also the possibility of further extending this session until 11:30 pm, according to an anonymous source mentioned in the report.

The motivation behind these longer trading hours is to provide Indian traders with the opportunity to react more swiftly to global events. Additionally, the NSE hopes to boost its trading volumes, as there have been concerns about major traders, including proprietary desks and hedge funds, shifting their activities to rivals like GIFT City, where trading is available 24/7.

The NSE has already submitted its proposal to the market regulator, the Securities and Exchange Board of India (SEBI), and is awaiting approval. SEBI has previously established rules that allow exchanges to keep futures and options (F&O) trading open until 11:55 pm and equity trading until 5 pm.

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The NSE intends to gradually introduce products in the extended trading hours, starting with index futures and options such as Nifty and Bank Nifty, before expanding to include stock derivatives. However, the expiry dates and timings for all products will remain unchanged.

While some market participants, including prominent brokers, question the rationale behind the NSE's decision to extend trading hours, they believe it may not necessarily lead to increased trading volumes and could potentially raise costs and employee dissatisfaction.