FO market closing timing in NSE extended by 10 minutes:Trading will be till 3:40 PM from August 3

The National Stock Exchange (NSE) has decided to extend the normal market closing timing for the Equity Derivatives, i.e., Futures and Options (FO) segment by 10 minutes. From August 3, this market will close at 3:40 PM instead of 3:30 PM. This change has been made as part of the rollout of the new Closing Auction Session (CAS) being introduced in the cash segment. Decision to align Cash-Derivatives markets together What is the Closing Auction Session and how will it work? The Closing Auction Session (CAS) is a short and defined trading period at the end of the day. In this, market participants submit buy or sell orders to determine a single and fair closing price for a security. The provisions of price bands and pre-trade risk controls associated with the closing auction session will also apply to the equity derivatives segment. Its purpose is to ensure continuity and smooth transition between cash and derivatives markets during the end-of-day trading process. Notification will be given on changes in operating price range of stock futures Under operational changes, whenever the operating price range for stock futures contracts is reset after the closing auction session begins in the cash market, NSE will broadcast a notification of this. According to the exchange’s existing rules, outstanding orders that fall outside this revised price range will be automatically cancelled. Closing price calculation method will not change, but timings will change The exchange said that there will be no change in the existing method of computing closing prices of derivatives contracts. However, the calculation of the Volume-Weighted Average Price (VWAP) window used to determine the close price will now be based on trades executed between 3:10 PM and 3:40 PM. This change reflects the revised timing of market close. Brokers will be able to test in mock trading sessions NSE has stated that the functional changes resulting from this implementation will be made available for testing during upcoming mock trading sessions. Brokers have been advised to update the relevant contract files in their trading applications before the effective date to ensure uninterrupted operations. This change in market structure will improve price discovery, enhance market integrity at closing time, and bring domestic market practices closer to international standards. New system will be implemented in phases under SEBI regulations According to SEBI’s circular issued on January 16, CAS will be introduced in different phases. In the initial phase, only the closing price of those stocks will be determined through CAS for which derivative contracts are available. For all other securities in the cash segment, the calculation of closing price will continue to be done as before, based on the VWAP of the last 30 minutes of the trading session. Know how the closing auction will work On all trading days, the closing auction session will run for a total of 20 minutes from 3:15 PM to 3:35 PM, with the schedule as follows… 3:15 PM to 3:20 PM: This will be the transition phase from Continuous Trading Session (CTS) to CAS. During this time, the reference price will be calculated based on the VWAP of trades executed between 3:00 PM and 3:15 PM. 3:20 PM to 3:25 PM: During this time, both market and limit orders can be entered. 3:25 PM to 3:30 PM: During this period, only limit orders will be allowed. Market orders cannot be modified or cancelled during this time. The order entry session will close randomly anytime between 3:28 PM and 3:30 PM. What is FO Market? A basic definition of the Derivatives Market (Futures and Options), briefly explaining that it is contract-based trading. What is VWAP? Volume-Weighted Average Price (VWAP) in simple terms indicates what the average price of a stock is based on its volume and price. ​