Share market timings have a significant impact when it comes to trading in the stock market. It is important to understand the different timings and their effects on your trades, as it can help you maximize your profits and minimize your losses.
First, it is essential to note that there are two major stock exchanges in India, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Both exchanges operate on weekdays, i.e., from Monday to Friday, except for public and national holidays.
The trading hours on both exchanges are similar, with pre-open calls, opening and closing sessions, and post-closing sessions. The pre-open call is the preliminary period before the trading session begins, where the market remains in a state of limbo. The opening session starts once the pre-open call session ends, where trading in the market begins. The closing session is the last session of the market where the exchange concludes the day’s trades. Finally, the post-closing session is when the exchange settles potential discrepancies, such as trade failures, and prepares for the next trading day.
The timings for each session are as follows:
1. Pre-opening calls session (9:00 AM – 9:15 AM)
During this session, investors can place orders to buy or sell shares, but the orders will not be executed. Instead, these orders will gather data and provide important opening price information that traders can use to enter the market at the right time.
2. Opening session (9:15 AM – 3:30 PM)
The duration of the opening session is 6.5 hours during which investors can execute the orders placed during the pre-open call session.
3. Closing session (3:30 PM – 3:40 PM)
This session is for the purpose of setting the closing price of securities. However, in some exceptional cases, extended trading sessions may be conducted if there is a significant change in the market such as a sharp increase or decrease in share prices.
4. Post-closing session (3:40 PM – 4:00 PM)
During this session, investors can place orders for the next trading day.
Now that we understand the different trading sessions and their timings let us discuss how these timings impact your trades.
When it comes to trading in the share market, timing is critical. The right timing is the key to maximizing your profits and minimizing your losses. Knowing when to buy or sell shares is the most important skill that every trader needs to master.
For instance, the pre-opening call session provides a crucial window for traders to gauge the market’s mood and make an informed decision about when to enter the market. As the opening price for most securities is determined during the pre-opening call session, traders can use this information to place orders at the right time.
Similarly, the closing session is just as crucial as the opening session. It provides a trader with an opportunity to sell their shares at the closing price, which may differ significantly from the opening price. Additionally, it also allows traders to monitor and update their portfolios if needed and prepare for the next trading day.
Moreover, it is also important to be aware of any significant economic events or announcements, as they can affect the share market’s timing as well. The Reserve Bank of India’s interest rate announcements, quarterly financial results, and budget announcements are some examples of events that can affect share prices.
To get a better understanding of how share market timings can impact your trades, let us consider an example.
Suppose you have invested Rs. 50,000 in Company A, hoping that the company will perform well in the coming months. However, a few days later, reports emerged that the company’s CEO resigned due to personal reasons, and the share prices started falling.
You will notice that the prices of the company’s shares started falling during the opening session of the share market. Therefore, if you wish to minimize your losses, it would be best to sell your shares during the opening session itself.
On the other hand, if you are looking to maximize your profits, it would be ideal to wait and observe the post-closing session and see how the market reacts to the news. If the market stabilizes, you can wait for the next trading day and sell your shares at a better price.
To conclude, mastering share market timings is an essential skill for anyone looking to invest in the stock market. Knowing when to enter or exit the market can make the difference between profit and loss. However, it is also important to note that trading in the Indian stock market comes with its pros and cons, and every investor needs to weigh these factors and make an informed decision before investing.
The information provided herein is for educational purposes only. The reader/ investor must evaluate all risks and uncertainties associated with trading, especially in the Indian stock market, and seek relevant professional guidance before making any investment decisions.
