NY Daily Wire
As market orders will now get priority over limit orders during the matching process, traders who want guaranteed execution need to place them within the first five minutes. Limit orders placed between 9:05 AM to 9:10 AM will provide the liquidity backdrop to absorb these market orders. India's stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), have revised the pre-open session rules starting today, September 7. The overall pre-open session remains between 9 AM to 9:15 AM, but the new framework changes how orders are collected, prioritized, and matched.
Between 9 AM to 9:05 AM, both market and limit orders are allowed, similar to older rules. However, from 9:05 AM to 9:10 AM, only limit orders are permitted, with no market orders allowed for placement, modification, or cancellation. Previously, a random system closure occurred between 9:07 AM and 9:08 AM, now shifted to 9:08 AM to 9:10 AM for limit order entries.
Market orders now have priority over limit orders during the price determination period. Traders relying on At-the-Market (ATM) orders to trade overnight news or global gaps must act within the first five minutes (9 AM to 9:05 AM). Previously, traders could place large fake market orders near the end of the session to manipulate prices, which is now restricted. This change aims to prevent late-stage manipulation and ensure better price discovery.
Limit orders between 9:05 AM and 9:10 AM will help stabilize the opening price by absorbing market orders, mirroring the Closing Auction Session (CAS) mechanism. This adjustment is intended to provide price-sensitive traders with a clearer window to react to initial order flow without sudden price swings.
Source: CNBC TV18
