The Extension of Trading Hours is almost confirmed now - Is it the End of Options Trading ? Actually SEBI approved it in the year 2018 itself. So it's not a surprise for most of the market participants. But many option traders are worried that this will affect their system.
All traders trading 6 hours every day are already stressed with this volatile market, and if it's extended till 11:55 PM, then everyone will be totally drained spending more screentime.
If trading hours gets extended, then people are worried that
1. Their current option trading strategy might not work any more.
2. Possibility of Gaps might reduce drastically, so it might affect traders whose strategy is mainly dependent on Gaps.
1. Their current option trading strategy might not work any more.
2. Possibility of Gaps might reduce drastically, so it might affect traders whose strategy is mainly dependent on Gaps.
3. Positional option trading strategy might become even more tougher, since option premium might decrease since possibility of gaps are lesser to due to lesser uncertainty, premiums might be lot lesser.
4. Discretionary traders are the worst affected, since their trading decision involves monitoring the charts and taking trades based on real time data, trading 9am to 11:55pm would be too much for them.
Know the history:
Earlier in 1993–94, the markets were opened for just two hours between 12 pm to 2 pm, later it was extended from 10 am to 3 pm, and now it opens from 9 am to 3:30 pm.
"Change is the only constant not only in life, applicable in markets as well"
Earlier in 1993–94, the markets were opened for just two hours between 12 pm to 2 pm, later it was extended from 10 am to 3 pm, and now it opens from 9 am to 3:30 pm.
"Change is the only constant not only in life, applicable in markets as well"
We need to understand WHY NSE is keen on increasing the trading hours?
Less than 2 per cent Indians invest in the stock market currently. This increase in time may give an opportunity to people who are doing a 9 am to 6 pm job who don't get the time to trade.
Less than 2 per cent Indians invest in the stock market currently. This increase in time may give an opportunity to people who are doing a 9 am to 6 pm job who don't get the time to trade.
Now, brokers will be able to pull them into the system and make them invest in the market, once the extended market hours come into effect. In coming 20–25 years, this 2 per cent investors is like to go up to 20 per cent.
For over a decade now, India has lost out in terms of trading volumes to Singapore, Dubai and US exchanges mainly due to shorter trading hours. NSE wants to gain this market share back from international exchanges.
Longer hours would enable mutual funds (MFs), banks and insurance companies that have large equity holdings to participate in hedging; the move will also give them more liquidity
Reports show that Nifty volumes on SGX were close to double those of NSE in 2021 in terms of amount and were more than 3x the open interest. These figures indicate a significant opportunity to attract larger volumes of trade on our own exchanges, says NSE.
Overall, NSE wants to increase their business profitability mainly by extending the trading hours, they just want to replicate what other international markets are doing. US Futures markets trade nearly 24 hours a day, 6 days a week, from 6:00 p.m. EST on Sunday to 5:00 p.m
But only Index futures are available during these extended trading hours. Options segment were not traded during this extended hours in developed markets. So mostly even in India, it's going to be only Index futures not options. Even Nitin also mentioned the same in his forum
I have covered in detail about it in this video, check it out for more info. youtu.be
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