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Market Timings: Pre-market, Post-market, After Market Order



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  • About market opening and closing timings*

Our Indian stock markets allow orders to be placed from Monday to Friday.

An order can be a buy order or a sell order.

Any number of orders can be placed using your broker provided software.

The stock exchanges start accepting orders from 9 AM

From 9 AM to 9:15 AM, we have what is called *pre-opening* session

Between 9 AM to 9:07 AM, every one in the market are free to put in their orders.

After 9:07 AM to 9:15 AM, the stock exchange

=> matches buy side orders and sell side orders and

=> then determine the opening rate of each of the company shares.

The time between 9:07 AM to 9:15 AM is the cooling period and new orders cannot be placed at this time.

Of course, a certain type of orders called *After Market Orders* can be placed. Will explain about this later.

During the 9:07 AM to 9:15 AM, some transactions might get completed during this time

.. if for a given buy, there is a corresponding sell at the same price.

The actual stock market opens at 9:15 AM after which everyone is free to put buy and sell orders

Our stock markets close at 3:30 PM

Remember, i told you about traders?

We have a special type of traders called *Intraday traders*.

Trading = buying and selling (or vice versa) of shares with an intention of not taking delivery.

These *Intraday traders* take *Intraday positions*

i.e

They buy a share in the morning

and anytime before the market closing, they sell the share.

A professional trader might do this buying and selling of shares several times within a day.

But they will close their positions by the end of the day.

So, their net position at the end of the day will be 0.

i,e they do not take any delivery of the shares

Intraday positions must be closed by 3:20 Noon

The closing time of the trading is generally determined by the stock broker.

Now here is the catch.

Pre market orders can be placed with limit price only?

Every share will have a price band called *circuit limit*.

It is the price range between which the share is allowed to move during the day.

So, during the pre-order session, you can place order for any price within that price band.

Now look at this scenario and tell me what happens:

If a trader buys shares at Rs. 1000 and

the stock price came down to Rs. 800 at around 3:20 PM,

will the trader be in profit or loss?

Yes. This is clearly a loss.

Loss of Rs. 1000 - Rs. 800 = Rs. 200 per share

Now, assume i bought 100 such shares.

How much will my loss be?

My loss will be :

100 shares x Rs 200 per share = Rs 20,000

And because i am a trader, i have to accept the loss by market closing time.

If i do not close the positions, the broker automatically closes the position

So, for traders, profits or loss will be determined by the end of the day.

Traders make a profit:

if they buy the share and if the share price went up from the price they bought.

Traders make a loss:

if they buy the share and if the share price goes down away from the price at which they bought.

This sounds simple but in real life trading, this is a very difficult thing.

The type of orders that traders put is called MIS

MIS = Margin Intraday Squareoff

Means, it is an intraday order that gets *Squared off* (or closed) by market closing time

Understood about trading?

But i told you, our role will be *investing* because we are *investors*

Unlike traders, investors need not have to worry about timings.

They can relax, observe the market moment and place order at a price that they feel is appropriate.

When an investor buys a share, he has to put his cash into the trading account.

So, investors buy shares with their cash being deposited.

The type of orders that investors put is called *CNC*

CNC = Cash And Carry

This means, you buy with cash and carry the shares

The shares that you bought today will come to your demat in 2 working days.

i.e T+2 days

T = transaction day

Between 9:15 to 3:30 PM, investors can watch the market and buy or sell their shares.

Questions:

There should be buyers or sellers to square off right... What if there are nobuyers and sellers?

For traders, if there are no buyers or sellers,

the broker will do an auction of the shares in the following few days.

This is an expensive task and invites penalty.

This happens in thinly traded shares where there will be little or no volumes.

Shares of companies that are not traded well on stock exchanges are of high risk for both investors and traders.

Always avoid such companies.

Question: I have seen shares moving 10% lower or higher in pre opening. So if somebody punches order at lower price will it be executed?

The price at which MOST of the orders match on buy side and sell side will determine the opening price. If our order is at that price or above, the order gets executed.

Now, we saw that during the pre-opening session, the *opening price* of the share will be determined.

After 3:30 PM, the stock exchanges do some adjustments related to the trades and then give a closing price of the stock.

The exact closing price of the stock will be published at 3:40 PM

So, for every stock on the stock exchange,

we will have two numbers:

=> Opening price

=> Closing price

Now, assume our stock opened at Rs. 1000 and closed at Rs. 1100

During the trading day, the stock price fluctuates

i.e it can go up or down several times during the day

The highest price the stock reached at any point during the day is called *Day High*

Similarly, the lowest price the stock reached at any point during the day is called *Day Low*

So, in total, we have 4 prices for a share

=> Opening price

=> Closing price

=> Day High

=> Day Low

Now, read this statement twice:

A stock can open with a "gap up" or "gap down" compared to previous day closing.

I will give you an example to understand these phrases.

If, for instance, TCS share closed yesterday at Rs. 1000

i.e closing price is Rs. 1000

Assume, the next day morning, it opened at Rs. 1100.

So, the opening price (of next day) is Rs. 1100

Observe the opening price has increased (compared to the closing price of yesterday)

This is called a "gap up" opening.

Here, the "Gap up" is of Rs. 100 (ie Rs 1100 - Rs 1000)

Similarly, if, TCS share closed yesterday at Rs. 1000 but opened at Rs. 900 the next day, it is a "gap down".

Anubhav [6:44 PM, 9/3/2016] SAnubhav: One query vijay sir to calculate peg ratio we need eps and growth rate [6:44 PM, 9/3/2016] SAnubhav: How to find growth rate

Yogi: Open Interest?

Bajpai:

Vijay Ji , Based on fundamental analysis .. any investor should enter any time in good script (like CRISIL) as investor going to block sum for long period n years .... or investor should wait to come down price @ specific level ?

In general, for an investor, the daily price fluations dosent matter much unless they move abnormally, like 5% or 10% within a day. We will have three investing methods which we shall discuss that helps u make use of market fluctuations for our good in investing.

Vijay Sir...pre open rate will be same as open always ?

@DrSharma: Yes. the rate determined at 9:08 AM will be the opening rate when the markets open at 9:15 AM

Can we change the MIS to CNC

Yes. Stock broker software allows us to change an MIS position to CNC and vice-versa, provided we have sufficient cash to do that.

[10:00 PM, 9/3/2016] SDrSharma: n mobile trade is there any option to do it..?yes..cash is there..eventhough ..we can change ourself ? [10:00 PM, 9/3/2016] SDrSharma: Celebrus iam unable so asked [10:00 PM, 9/3/2016] SDrSharma: Cash is there.. [10:00 PM, 9/3/2016] +91 98495 19188: Yes. It is a common feature available with all types of trading software. They call it Convert Position

[10:02 PM, 9/3/2016] +91 99983 14439: Sometimes we see low pe stock not moves n high pe stock continues moves...!! [10:02 PM, 9/3/2016] +91 99983 14439: May b the data we saw in different sites its how extent reliable?

From what i know, there is no correlation between extent of PE and the moment of the share price.

Share prices move based on demand and supply, company, sector and business news, market trends etc.

The data provided by the stock broker is the most reliable one.

There will be a time lag of approximately 2 minutes between the price shown on your trading software and on public websites like NSEIndia.com or MoneyControl.com

I m talking about companys activites updates

Yes. Some companies are proactive and publish any changes happening with them.

Unfortunately, Most companies do not publish company updates except for mandatory information.

One of our fundamental criteria is to go for proactive companies.

Sir kya hum 9 am to 9.07 am mai share purchase kar sakte ha

Between 9 to 9:07. you can place order. The transaction may or may not happen between 9"08 and 9:15. But after 9:15, the order becomes an open position and is as good as a placed order.

Does speed of net connection effects execution of order

The speed of net connection is more important for a trader than investor.

Retail traders like us have a standard data ticks rate sent by the broker.

So even with a much faster broadband, u will recive the same number of ticks per minute.

Most broadband and mobile 3Gs are sufficient speeds for us.

Placing order aftr 9.08 i think ..before 9.08 possible Sir ?

Pre-Order placing time: 9:00 to 9:07

Order matching time: 9:08 to 9:15

Technically, an AMO can be placed anytime before 9:15.

I will explain about AMO later.

How spike in price happens in mkt open..? Does mf exchange shares or block or bulk deal makes spike

Sir,can I sell a share that was bought in BSE,in NSE ?

When we buy a share, say on NSE, it will take T+2 days to come into our demat account.

Once it comes to our demat account, you are free to sell it either on NSE or BSE.

In general, it is better to transact on NSE because more number of transactions happen there (compared to BSE)

@vijay sir one request if u have any pdf on the topics ur covering it will be easy for us for documentation purpose

@Harish: I cannot do a pdf publication of these classes since I am not SEBI certified. Further, i do not give accurate definitions in the class. I prefer easy to understand terms. I can, however, share the text file transcripts if u want so u can convert and use as u want.

Sir is there any other benefit why most people trade on bse ??

I actually see the opposite. Most trades happen on NSE over BSE.

BSE allows trading in small companies shares. So the number of companies listed on BSE are more. May be that was the reason for your perception.

My experience is that NSE is quality conscious and hence reasonably good company shares are traded there (comparatively)

After Market Order (AMO)

AMO = After Market Order. An order placed after the closing hours of the market but before the opening hours on the next day. More explanation, will provide later.

This is a type of order that you can see in your trading terminal.

AMO Order can be placed after the closing of stock exchange transactions but before they open at 9 PM the next trading day. AMO is a type of order that you can place in your trading account.

Different brokers offers different time frames at which such orders can be placed.

For Kotak AMO, read https://www.kotaksecurities.com/ksweb/Our-Offerings/Value-Added-Features/After-Market-Orders

Price mismatch between stock exchanges

Many times it is seen- price difference between the two exchanges,why? Then I may sell my stock on the high priced exchange

Yes. BSE and NSE are two different separate exchanges. You are free to sell on which ever exchange you want once the shares are in your demat.

Why the difference in prices? Depends on the number of buyers and sellers. Generally BSE has fewer traders and trading volumes.

Question: In general trading days...can we buy or sell in between 3.20 to 3.30 pm?

Yes. CNC orders can be placed and traded. i.e You can trade with cash (and if required take delivery of shares). But you cannot place / trade with margin money.

MIS or Margin Intraday Square off orders cannot be placed between 3.20 to 3.30 pm

What is *Face value* of a share?

  • Face Value*, also called par value or par, is the accounting value of a company's stock for balance sheet purposes.

So, if you look at a company balance sheet, it shows how many shares are issued by the company and what is that accounting value per share.

For example, a company XYZ wants to issue shares to raise some Rs. 10,00,000 for the construction of a factory.

It wishes to issue 1,00,000 shares to raise the money.

So, the face value per share is Rs. 10,00,000 / 1,00,000 = Rs. 10 per share

When these shares are listed and get traded in the stock exchange, the market value of the share changes depending on the buyers and sellers.

For instance an investor ABC sells 100 of his shares at Rs. 11 because a buyer is ready to buy them.

So, this price at which the shares are exchanged, Rs. 11, is the market value of the share (current market price) at that point of time.

However, the face value of the share (as on account books of the company) will remain the same.

The face value changes when the company decides to allot more shares, or buy back shares, or split the shares at a later stage.

Now, instead of wishing to issue 1,00,000 shares, assume the company wishes to raise money issuing 2,00,000 shares

So, the face value per share is Rs. 10,00,000 / 2,00,000 = Rs. 5 per share

As you can see, the company issues more shares to raise the same amount of money but instead of FV Rs. 10, it did so with FV Rs. 5

Sir. Can we put buy/ sell order during 9-9.07 am...if yes, should we put it??

Yes. You can put orders in the pre-market opening hours between 9 to 9:07.

If you are sure of a certain price at which you wanted to buy, u can put without waiting for the market to open.

Similarly, if you have taken delivery of some shares but later realized you do not want to take them at sell at the market price, you can put a post-market sell order (between 3:40 PM and 4:00 PM)

What is a Disclosed Quantity?

Normally, the order quantity is disclosed in full to the market.

An order with a Disclosed Quantity (DQ) condition/attribute allows the Trading Member to disclose only a part of the order quantity to the market.

For example, an order of 1000 with a disclosed quantity condition of 200 will mean that 200 are displayed to the market at a time.

After this is traded, another 200 is automatically released and so on till the full order is executed.

DQ (Disclosed Quantity) should not be less that 10% of the Order Quantity and at the same time should not be greater the Order Quantity.

Example:

Order will be actually put for 500 shares

But showing on the terminal screen, it will be 10%

so it shows as if it is a 50 share order

Stock Exchanges that are open on Weekends / Sundays

For the Indian and most global markets (including the US, UK, China and Japan), Saturdays and Sundays are weekend off. However some major stock exchanges are open on Sundays as well. These include:

  1. DFM Index – This index is based on the Dubai stock exchange, one of the major exchanges that is located in the United Arab Emirates.
  2. Tel Aviv 25 Index – The Tel Aviv 25 Index is composed of the top 25 companies – based on their market capitalization – in the Tel Aviv Exchange. This exchange is the only market that is available for trading securities in Israel.
  3. Kuwait Stock Exchange – The Kuwait Stock Exchange represents the stock index for the national Kuwaiti stock exchange that is inclusive of investment companies, banks, real estate, and insurance companies located in Kuwait.
  4. Tadawul Index – This exchange is the only stock exchange that is located in Saudi Arabia.

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