The National Stock Exchange of India (NSE) on Tuesday announced that it will allow trading of interest rate derivatives to continue till 5:00 p.m. from February 23 onwards.
The existing trading hours for interest derivatives are for six and a half hours from 9 a.m. to 3:30 p.m.
The extended trading hours will not apply to derivative contracts expiring on Feb 23.
The order is for all existing contracts ending after February 23 and all new contracts will have extended trading hours.
NSE also confirmed that the final settlement price computation mechanism will remain the same.
Nithin Kamath, the CEO and co-founder of Zerodha, India’s largest brokerage expressed a conflicted opinion on the extension in trading hours.
Kamath’s tweet said “Extended trading hours for F&O will maybe signal the maturity of our markets. They also level the playing field for domestic traders against international traders and are also good for capital markets businesses in terms of revenues, but I’m conflicted”.
Kamath also raised concerns about the long-term impact of the extension of trading hours on being stressful and “affect life outside trading”.
Interest rate derivatives refer to futures contracts based on financial instruments that pay interest such as bonds including government bonds.
Investors and financial institutions use interest rate derivatives to insure the risk against future fluctuations in interest rates.
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