Thursday, July 22, 2010

SEBI guidelines on Pre opening session

Further to my previous blog on Pre-opening session, there are few point to note from SEBI guidelines.

a) The post closing session will start at 9.00 am and the time up to which order can be put is between 9.07  to 9.08 am. The pre-opening session will close randomly anytime between 7.07 and 7.08am. This is good tools to implement as most people will wait till last movement to put their order as they may not want to disclose their appetite to market, there will also be probability of price manipulation in pre - opening session by putting orders at last movement. Such move of  randomly opening market any time by SEBI will put rest to such practices by market players as they will have to decide between disclosing order to market ( if market opens late) or wait till last movement and risk that order do no go through.

b) SEBI has disallowed disclosed orders in pre opening session.

c) There is no clarity on unexecuted market order, as to what will happen to such orders wilt the start of normal market. Will such unexecuted market order would complete its market order will the opening of normal market or Market order will become Limit orders , Also if such orders are limit orders what would be the limit price.

d) SEBI has said Pre opening session will start from 9.00 to 9.15. But there is no clarity on stocks which are not there in pre - opening session, when will they open ? would it be 9.15  or at 9.00 o clock.

Also what about the opening time of derivatives market ? would it be 9.15  or 9.00.

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