NSE extends trading hours for interest rate derivatives till 5 pm

The National Stock Exchange (NSE) extended the trading hours for interest rate derivatives to 5 PM. The change in trading hours will take effect from February 23.

In a circular issued on Tuesday, the leading stock exchange said that the trading hours for interest rate derivatives would be extended till 5 PM from 3:30 PM. The new trading hours will be 9 AM to 5 PM. The extension of trading hours for interest rate derivatives is done to converge the trading hours with the underlying market timings.

The NSE circular stated that interest rate derivative contracts for expiry in the current month will be available to trade till 5 PM on the expiry day, February 23, 2023. All the existing contracts expiring after February 23, 2023, and all the new contracts introduced thereafter will be available for trading till 5 PM on expiry, the circular added.

The bourse also said that there will be no change in the trading hours for other interest rate derivative contracts.

It also clarified that the final settlement price computation mechanism will not change. It will be calculated on the final two hours of VWAP and NDS OM trades, subject to a minimum of 5 trades.

The move by NSE comes amid the talks of extension of trading hours in the equity derivatives segment. As per reports, the exchange’s MD & CEO Ashishkumar Chauhan also said that it was working with its members and taking their feedback on the extension of trading hours.

Also read: NSE mulls extending equity segment trading hours; Will investors benefit?

The purpose of extending trading hours is likely to help Indian traders and investors better hedge their risk. Since Indian markets are affected by global markets, any news flow or information can have an impact on the Indian markets.

By extending trading hours, traders can make the most of the information in order to manage overnight positions and hedge themselves in a more effective manner. Furthermore, the extension of trading hours will bring large volumes to the stock market and attract mutual funds and foreign investors.

Although extended trading hours may be beneficial for the Indian markets and help traders manage risk in a better manner, it can also result in a high cost of operations.

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