What is a Trading Session?

By Research Desk
about 2 months ago
1

Trading session is the period where all the financial dealings take place on the exchanges.

In India, stock exchanges, or simply stock market, remain open on all weekdays except notified exchange holidays, Saturdays and Sundays. Also, during Diwali, the stock exchanges holds a special Mahurat Trading session which is held in the evening for about 75-90 minutes and the timings are declared a few days earlier.

The trading session of stock exchanges in India comprises of:

  1. pre-open session
  2. continuous trading session
  3. closing and post-closing session.  

Trading starts with a 15 minute pre-open session from 9 am to 9:15am. It comprises of Order Entry Period and Order Matching Period. The order entry period is for a duration of 8 minutes, where order entry, modification and cancellation is allowed. The order matching period starts immediately after order entry period and no addition, modification or cancellation is allowed. This session helps to determine the opening price and also provides trade confirmation.

Continuous trading session starts from 9:15am to 3:30pm where trades occur continuously as orders keep matching at a given time and price.

Two more sessions namely closing and post close occur after the continuous trading session for a period of 3:30pm to 3:40pm and 3:40pm to 4pm respectively. Closing session is basically for VWAP Closing Price Calculation and Post Close session relates to execution of trades at the closing price determined.

 

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