How to trade in Pre-Open Market session?

Learn everything about Pre-Open Market session

July 3, 2022 Nitin P

If you’re interested in finding out how to trade in pre-open market session, keep reading.

Taking a trade in Pre-open market session is easy and simple in both NSE and BSE.

How to trade in Pre-Open Market session?

Prior to the start of the regular trading hours in NSE and BSE, pre-open market trading takes place. You can place the orders between 9:00 AM to 9:07 AM, i.e just before the main trading session starts.

Pre-open market trading volumes are typically much lower than during regular trading hours. Investors and traders find it difficult to execute transactions because there are very few participants active before market hours, i.e. 9:15 a.m. Because investors and traders have less liquidity in premarket sessions, converting stocks into cash, prices may not adjust as quickly as they do in regular market sessions.

The pre-open market order entry session starts from 9:00 AM to 9:07 AM (7 Minutes). If you know how to place the orders in regular trading session then you have to use your borkers terminal in the same manner to place the pre-open market session orders.

This session allows you to place a buy and sell order for stocks using limit order or market order. Orders can be modified or cancelled. No orders are accepted after the first 09:07AM.

After the order entry session pre-open market order matching session starts for order confirmation and order matching.

During the order matching session, the opening price of stocks for the regular trading session is calculated. During this session, no orders can be bought, sold, cancelled, or modified. Your orders will give you error if you try to place it.

Reamining time till regular market trading starts is known as pre-open market buffer session. Nothing happens in this session. It makes the transition from pre-open to regular market session easier.

FAQ on 'How to trade in Pre-Open Market session?'

know the answers to most commonly asked questions

April 1, 2022 Nitin P

who can trade in pre-open market session?

Anyone can trade in both NSE and BSE pre-open market session. In case it is disabled for you, then you need to contact your broker to enable it. Most of the known brokers allow traders to participate in pre-open market session.

how to buy shares in pre open session?

Place a limit buy order or market buy order similar to what you place in regular trading session in NSE and BSE.

how to sell shares in pre open session?

Place a limit sell order or market sell order similar to what you place in regular trading session in NSE and BSE.

how is pre market price determined?

The opening price of the stock is determined using the demand supply mechanism. The equilibrium price is the price at which the maximum volume of a contract can be executed. In case, more than one price meets the set of criteria, the equilibrium price is the price at which there is the least amount of unmatched order quantity. If multiple prices have the same minimum order unmatched quantity, the equilibrium price is the one closest to the previous day's closing price. If the previous day's closing price is the midpoint of two prices that are closest to it, the previous day's closing price will be used as the equilibrium price. In the event of a corporate action, the previous day's closing price is adjusted to the closing price or base price. Limit and market orders are both taken into account when calculating the equilibrium price. The equilibrium price determined during the pre-open session is used as the day's open price. If only market orders exist on both the buy and sell sides, the order is matched at the previous day's close price or the adjusted close price / base price. The opening price is the previous day's close or adjusted close price / base price. If no price is discovered during the pre-open session, the price of the first trade in the normal market becomes the open price.