SEBI allowed to extend F&O trading till 11:55 p.m from Oct. 1.

[kainiteh]

- Definitely eyes get stress and need to skip evening playing session
- Wondering how nifty moves without reference of stocks move.
- Next day gap may predictable for stocks correlated to nifty moves
- less time to drink beer
- Part time trader have better option to do trade
- New york opening and london closing strategy may works
- need to tune setup for index
- less time to sleep
- brokers will be happy in taking brokerage whole day
- higher chance for overtrading

 

[soft_trader]

Extended Derivative Trading Time: Learn how it will impact Option Traders

https://www.moneycontrol.com/news/b...ow-it-will-impact-option-traders-2563267.html

 

[cinderblock]

If exchanges extend derivatives trading time, what impact its going to have on option premiums?

The easiest way to think about this is to use an option calculator.

What would you input as time to expiry now?

What would you input as time to expiry after extended trading hours?

Is Black Scholes mistaken? Not really. Perhaps a reflection on the nature of "Time" in finance might help!

 

[sanju005ind]

Extended Derivative Trading Time: Learn how it will impact Option Traders

https://www.moneycontrol.com/news/b...ow-it-will-impact-option-traders-2563267.html

Nothing new.We already take futures prices instead of spot in calculating

 

[headstrong007]

Don't too much worry. We commodity traders have Life, don't stress eyes, sleep well, enjoying our life well. Stock traders will adjust slowly.

We don't even need to watch the market all time. Trailing stop and target takes care the trade. The various sound alert system is also there based on price, trendline or indicator signal. For visual price action traders usually, 1-2 hour window is good for trading.
I usually trade the stock market in tow 1-2 hr window opening and closing. And two 1-2 hr window for crude one approx 5-7 another US opening time/inventory time.
Positional Commodity traders also don't continuously monitor the market.

Frankly speaking, see the real-life commodity traders, they actually spend less time monitoring the market, than stock traders. They are used to the longer trading hour. They either trade in the specific time window usually when commodity moves- in the evening or puts trailing stop and target efficiently in the system. Commodity traders do attend social functions @ night, when their positional trade or intraday trade is going on.

If the market is open there is still chance to execute stop and target but if the market is close it is out of our hand. So longer market hour cut the overall risk and decrease the volatility. Volatility is itself the measurement of risk. And it is proved that longer trading hour reduces the volatility and price shock.

As a result of the lesser trading hour- approx 6 hour stock market opening time stock traders have a bad habit to watch the market continuously. Watching the screen over 2-3 hrs without a break hurt our eyes and injurious to our health too. With longer hour stock traders will learn how to choose the short trading window. IMO.

Actually currently there is only two 1-2 hr short trading window in stock market, one is @opening another is @ closing. Now a 3rd window will open around US market open and additional windows with world major economic data release time. Sometimes major data released b4 US market opening around 4:45pm-6:45pm. Trending move also can happen around there.

Don't worry, too much with some cons it will give more trading opportunities. There are times when due to a social function or some urgent commitment in daytime we miss trading. 3:30PM is too short time to come back to home. Usually, by the evening we come back to home. Now, still, we can get another opportunity to trade during US opening. Take it as positive.

 

[headstrong007]

My major worry is the actual effect on option premium.
Volatility is going to decrease for sure which will decrease the premium.
But on the other side, it is 2.5 times more time. 6 hr to 15 hr. I am not sure about the effect of this, as the input is in the number of days in the calculator not in hours.
The difference is day premium will reduce(using time decay) in 15 hours now instead of 6 hours, its 2.5 times slower if premium per day remains the same. Then overall prem will also decrease as volatility will decrease.
But if prem is calculated on an hourly basis, then there is a pain for options traders. Then, overall Premium is going to increase significantly due to 2.5 times of longer hours. I am not sure about that if anybody has the clear idea share.

 

[headstrong007]

NSE Chief Executive Officer Vikram Limaye welcomed the Sebi decision allowing domestic equity bourses to extending trading hours in equity derivatives till 11.55 midnight.

He said it is very unlikely that market participants would have any opposition to such a move.

He said NSE would also like to keep the cash market open till 11.55 midnight, but market participants do not seem to like the idea.

*************
Meanwhile, Limaye said NSE will launch commodity derivatives from October 1. The bourse has already applied for the Securities and Exchange Board of India for the license to launch a commodity derivatives platform.

https://economictimes.indiatimes.co...ut-ceo-wont-say-much/articleshow/64045248.cms

 

[headstrong007]

Vikram Limaye, MD & CEO, NSE said that it is very hard to predict quantum to increase. “But, I do believe in trade volume after implementation of this circular. Since you are giving the option to trade more time and secondly giving hedging option in the corporate action after a traditional trading hour,” he said.

It is clear from above comment at least INDEX OPTIONS are on the menu(dinner).

 

[headstrong007]

Extending time is in Sync with global markets:

Ashishkumar Chauhan, MD & CEO, BSE said that globally, the derivative exchanges are already following the extended trading hours. The introduction of the extended hours is a positive development.

Limaye of NSE says that it is a good development for the market since we are moving to in line with global standards. “There are enough examples where derivative market opens much longer time than cash market. So again I would say it is a good move,” he said.

 

[soft_trader]

In my opinion I think the exchanges should test the water with index derivatives first, and after that they may extend stock derivatives. It will help the traders to adjust to the new timings and also option geeks in a phased manner.