In a major market development, the National Stock Exchange (NSE) will launch a pre-open session for equity futures and options (F&O) starting December 8, 2025. This move aims to improve price discovery and reduce volatility in the derivatives market, aligning it with the equity cash market’s pre-open call auction mechanism.
New F&O Pre-Open Session: Timing and Format
According to NSE, the F&O pre-open session will run daily from 9:00 AM to 9:15 AM, following a call auction format similar to that of the cash market.
Order entry, modification, and cancellation will be allowed between 9:00 AM and a random close between 9:07–9:08 AM.
This will be followed by price discovery and trade matching until 9:12 AM.
A three-minute transition period will ensure a smooth shift into continuous trading at 9:15 AM.
Scope and Coverage
Initially, the mechanism will cover current-month futures contracts on individual stocks and indices. It will later extend to next-month futures during the final five trading days before expiry.
Notably, options contracts, spread contracts, and those affected by corporate-action ex-dates are excluded from the pre-open session.
Key Features of the F&O Pre-Open Session
Traders will have access to indicative opening prices and real-time order imbalance data during the auction.
Both limit and market orders are permitted, but stop-loss and immediate-or-cancel (IOC) orders will not be allowed.
Unmatched limit orders will carry forward to the normal trading session with their original time stamps, while unmatched market orders will automatically convert into limit orders at the discovered opening price.
All orders will be margin-validated at entry, and self-trade prevention checks will remain active.
Trades executed during the pre-open window cannot be cancelled, the exchange clarified.
Testing and Rollout
To ensure readiness, NSE will conduct a mock trading session on December 6, 2025, allowing brokers and market participants to test the new system ahead of its live implementation.
The introduction of this pre-open session for derivatives is expected to enhance transparency, price efficiency, and market stability at the start of trading each day.
