Pre-market/Post-market/After-market Orders

Pre-Market Orders

Both the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) start their regular trading sessions at 9:15 a.m. Pre-market trading is the buying and selling that occurs during the 15-minute window right before the regular trading session, i.e., from 9:00 – 9:15 A.M.

The goal of pre-market trading is to keep prices stable before the regular market begins. It allows the market to open at prices defined by actual demand and supply of financial securities rather than price trends established by early transactions.

Even when the stock market is closed, financial news and announcements tend to influence trader’s decisions about whether or not to invest in a certain stock. The effect of these developments can be used to determine the opening prices when the regular market opens through pre-market trading. As a result, the regular market remains less volatile and more stable.

HOW DO THEY WORK?

The pre-market session, as you may know, begins at 9 a.m. and ends at 9:15 a.m. The whole 15 minutes are divided into three slots based on the operations permitted during that time.

1. Order Collection Period:

   This period begins at 9:00 a.m. and lasts until 9:08 a.m. or 8 minutes. During this time, you are permitted to engage in the following activities:

   1. Placing a purchase or sale order.

   2. Any alterations to the current order.

   3. Cancellation of a placed order.

2. Order Matching and Trade Confirmation Period:

   It lasts 4 minutes, starting at 9:08 a.m. and ending at 9:12 a.m. During these four minutes, the following activities are carried out:

   1. Order confirmation and matching of orders received throughout the order collection period.

   2. Stocks' opening prices are calculated using the "Equilibrium Price Determination" method for the regular trading session, which begins at 9:15 a.m.

   Limit Orders are given higher priority than orders without a stock price specification (Market Orders).

3. Buffer Period:

   The buffer period is the last three minutes, from 9:12 to 9:15 AM. This time is utilized as a buffer to handle any issues that may have arisen during the previous phases, as well as to ensure a smooth transition to normal trading hours.

Post Market Sessions

Post Market Session starts from 3:30 pm up until 4:00 pm but it is divided into two parts.

• 3:30 pm to 3:40 pm – In this 10 min session exchanges are closed for trading and no order can be placed. In this session, the exchange calculates the closing price of each individual stock and the index.

• 3:40 pm to 4:00 pm – Under this 20 min session exchanges are open for trading, and you can place a buy or sell order in this session. Few important points to note are:

  • Intraday orders (MIS) cannot be placed in this session only Delivery order (CNC) is allowed to be placed.

  • In this session, a person can only place an order in the cash segment. Placing an order in the F&O segment is not allowed.

  • A person can only place a Market order. All the orders other than the market order will be rejected.

NOTE: You may face liquidity issues in the post-market session as not lot of people are active in this session.

After Market Orders

After Market Orders (AMO) are used to place orders for the following days after the market closes. These orders must be placed after-market hours but before the start of the next day’s trading session. Following are the lists of timing for AMO for every segment but, an investor should check with their broker to see what the exact timing is to place AMO as these timings depend from one broker to another.