How is the NSE/BSE Stock Open Price Determined?
Features of NSE Stock Open price
- The opening price of the stock is price at which a first trade take place when NSE opens for the day.
- An opening price of the stock is not equal to its previous day’s closing price.
- Buy Orders by Buyers and Sell order by sellers determine the NSE Stock Opening price.
Demand and supply for a stock is the major factor on which the stock opening price is determined in NSE market before we tell you how the NSE / BSE stock open price are determined, we should know the NSE market timings and what happens during the same.
NSE Market Timings
The Market timings can be divided in to four parts
1) Pre-open Session: (9:00 AM to 9:15 AM)
2) Regular Trading Session : (9:15 AM to 3:30 PM)
3) Closing Price Calculation Session : (3:30 P.M. to 3:40 PM)
4) Post Closing Session : (3:40 P.M. to 4:00 PM)
1) Pre-open Session & Stock Price Discovery:
NSE/BSE Stock open Price determined in the pre-open session, so we should study the pre-open session in detail. We at A1 Intraday tips have given in-depth information about Pre-Open session that is easy to understand for beginners in the stock market too.
2) Regular Trading Session: (9:15 AM to 3:30 PM) : Normal trading take place during this session. Trade take place depending on the order places by buyer and sellers.
3) Closing Price Calculation Session: (3:30 P.M. to 3:40 PM) Closing price is calculated based on 30 minutes weighted average price from 3:00 pm – 3:30 pm. during this session.
4) Post Closing Session: (3:40 P.M. to 4:00 PM) : Similar to pre-market orders, post-market orders are allowed only for equity trading. The post-market session or closing session is open from 3:40 PM to 4:00 PM.
Pre–open market Session
Pre–open market session is divided in to three sessions.
Order Entry Session: The First session takes place between 09:00 AM Till 09:08 A.M. both Market and limit orders can be placed, modified or cancelled during this Pre-open-session.
Price Discovery Session: This session happens between 09:08 till 09:12 am, Price discovery happens during this session as both buy order and sell orders are matched during this session.
Transition Session : This session is the final session of just 3 minutes that start at 09:12 and ends at 09:15, when the normal market opens for trading. This is the transition period from pre-open session to normal market.
How the opening Price of the Stock is determined?
Pre-open session is a 15-minute session in NSE market (9:00 AM to 9:15 AM), which helps to get the opening prices of stocks traded in NSE. It is basically the period of trading activity that takes place just before the regular stock market session. During the pre-open market session, system takes all orders that are executed and then arrives at an equilibrium price.
The calculation of prices is completely automated, software driven and anonymous at both BSE and NSE, and the price is calculated by electronically matching bids and offers for a particular share recorded an electronic limit order book (ELOB). The equilibrium price is the price of the stock that is derived based on the demand and supply of the stock during that time.
NIFTY 50 and SENSEX 30 stocks at NSE and BSE respectively, have been enabled for trading in the Pre–open market session by the exchanges.
We have provided in depth information about how the opening price of the stock is discovered during the pre-market session. This is very important for traders as they are clear of the happenings in the NSE market.
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