You may have watched on business news channels a pre-open session for NSE and BSE from 9.00 AM to 9.15 AM during market days. But you actually know how your placed orders are executed during this session? It is very interesting and must know factor for all who are interested to invest in stocks.
Before we proceed let us look for the types of orders you can place in market. Their are two types of order placing methods. 1) Market orders-These are the orders where you have not specified any price while buying or selling. Hence such orders execute as per the availing market rates. 2) Limit orders-These are the orders where you have specified the price and quantity for buying or selling. These get executed once find the matching orders.
Pre-open session as I told above starts from morning 9.00 AM to 9.15 AM during the market days. This 15 minutes consists of mainly 3 slots.
1) 9.00 AM to 9.08 AM-Order collection period-During this period you can place the orders, modify or cancel them.
2) 9.08 AM to 9.12 AM-Order matching period and trade confirmation period-During this period placed orders are confirmed based on the price identification method called “Equilibrium price determination” or “Call auction”. Will discuss about these methods below. During this period you are unable to modify or cancel the placed orders.
3) 9.12 AM to 9.15 AM-It is called buffer period and which facilitates transition from pre-open to normal market session.
How Equilibrium Price determination or Call-auction session actually works?
Let us say with example of XYZ stock and previous days closing price of the stock is Rs.100. Now during the market pre-open session types of price and quantity reflect may be as below.
1) Scenario I-We found only one share price with highest trading quantity.
In above case share price with 105 have highest trading quantity with 27,500. Hence it will get executed as equilibrium price or call-auction price.
2) Scenario-II-We found two matching maximum tradable quantity for different share prices.
In above case we found two matching maximum tradable quantity for share price of 105 and 99. In that case minimum unmatched orders quantity is for 105 (8800) than 99 (9000). Hence in this scenario share price 105 is considered as equilibrium price or co-auction price.
3) Scenario-III-We found two matching maximum tradable quantity and same unmatched orders for them too.
From above table we found that for the share price of 105 and 99 we have matching maximum tradable quantity and same unmatched orders. In such scenario previous days close is come into picture. Here I told earlier that previous days close for XYZ is 100 which is nearer to 99 than the 105. Hence in above case 99 is considered as equilibrium price or call auction price.
4) Scenario IV-We found two matching maximum tradable orders with same unmatched orders and share price are equally distanced from previous closing price of share XYZ.
In above case we found that share price 101 and 99 have same maximum tradable quantity and same unmatched orders. Also share prices 101 and 99 are equally distanced from previous days close. In such case previous days close share price 100 is considered as equilibrium price or call-auction price.
Points to remember regarding Pre-open session.
1) After finding the equilibrium price or call-auction price all market orders are executed at the equilibrium price and all no executed limit orders are carry forwarded to open market as it is.
2) Price band of 20% shall be applicable on the securities during pre-open session.
Any comments or suggestions?????
Arun
I want to understand the priority of order in the below condition.
During a pre-market value one places a buy order with price set to market value. But, unfortunately it’s not executed at 9.08 am due to high demand and low supply. also the share gets locked at upper circuit and there a many pending limit orders at pre-market (9.08am) session.
Now, at 9:15, I know that all market orders will be pushed as limit orders with opening price value. But, real question is which has the highest priority? The order that was places as market order during pre-market or the pending limit orders with buy price as upper circuit price ?
Basavaraj Tonagatti
Dear Arun,
As per me, it should be Market order druing pre-market.
Akshay Badakh
Sir my question is, in Pre market session(in ipo) share is fistly listed on issue price ? if yes then why this price not consider as Opening price ?
Basavaraj Tonagatti
Dear Akshay,
Pre Opening is different than the already listed share for newly listed.
Mahesh Vijay vedak
Hi sir hw r u…my question is can I buy share at 9am for intra day? and is there any advantage of gap up opening after buying share at 9am for intra day ?? Or I will able to buy at 9:15 only ?..plz leave comment
Basavaraj Tonagatti
Dear Mahesh,
You can place the order during Pre-Open but confirmed at 9.15.
Phani
Sir,which host site are u using,to host your website
Basavaraj Tonagatti
Dear Phani,
May I know why?
Venkat Iyer
Hello Sir
What is the difference between “Buy and Sell” and “Demand and Supply”. I tend to think Buy = Demand and sell = Supply. How there are different. This may be a very basic question. Kindly explain
Regards
Basavaraj Tonagatti
Dear Venkat,
Buyer demanding and selling is the supplier.
Keerthi
Hello Sir,
Very well explained!! Thank you for that.
Will you please don’t mind to answer my question.
How to make sure that order is executed first in the day?
Like by placing After Market Order or Pre-Market Order?
Which is given higher priority?
Thank you in advance!
Basavaraj Tonagatti
Dear Keerthi,
It is a supply and demand based. Hard to say.
Prakashrao
Sir, my question is: for ex: on 14-08-2020 Pre open market price declared as Nifty50 11.353.30 52.85 (0.47%) Advances:44 Declines: 4 Unchanged:2
Here Nifty50 open price is 11353.30 and the difference price from Yesterday’s Close Price is 52.85 here they mentioned in % as 0.47%,
i want to know this percentage calculation method/ pattern. If any knows about this please mail me hmsgdg@gmail.com or on whatsapp 9481056949
Thanking you
Prakashrao
9481056949 karnataka
Basavaraj Tonagatti
Dear Prakashrao,
Better you contact NSE.
Raghavendra murti
Good morning sir, during 9 to 9.08 am only we can place orders in stock market during pee market session. After 4 min trade confirmation happens. Then why there is increase number of trade during first 8 min.
Basavaraj Tonagatti
Dear Raghavendra,
If your question is post-Pre-Open, then it is value of buyers or sellers. Hard to say WHY.
vijay
At what basis order will executed.. i asking in terms of priority lets say 100 is uc and 10-15 order have been placed on previous day @market than
which order executed first?
Basavaraj Tonagatti
Dear Vijay,
It is always based on demand and supply. If you refer above post, you will get clarity.
Smruti
Sir,
Nice article.
Could you please explain below point.
2) Price band of 20% shall be applicable on the securities during pre-open session.
Another Query: After Market Order with Market Price (not AMO with LIMIT), How it is calculated in pre order session.
Which has highest priority?
Basavaraj Tonagatti
Dear Smruti,
It means the bid and offer price must not be more/less than 20% of the previous day’s closing price. “Which has highest priority?”-The price discovery will continue as usual irrespective of the price you set the order.
Vinod
Thanks for explaining things beautifully, it cleared lot of doubts. Here I have one more
Does FIFO applies on pre-market session and later on AMO orders or vice versa?
Basavaraj Tonagatti
Dear Vinod,
Yes. FIFO applies for pre-market session.
Adarsh
Sir,
Your post is very informative.I have 3 query.
1.some shares allotments takes place place even in upper circuit.What is the logic for allotment is it FIFO basis or some other.
2 Is there any difference between ami orders and pre orders in allotment.
3 Is there any difference between limit orders and market orders while allotment in uc.
Basavaraj Tonagatti
Dear Adarsh,
1) FIFO basis.
2) AMI means?
3) Yes.
Prince
Wonderful explanation ! Thanks a lot.
I have a query i actually placed a market order in between 9 to 9.05am and then cancelled and placed a limit order for it before 9.08am, but, even after that, my order got executed at the equilibrium price.
Is this also a scenario and can happen or should i contact my broker if its an issue ?
Basavaraj Tonagatti
Dear Prince,
Check the exact punching times and then you can complain.
Reena
That’s the beautiful explanation. Many thans for that. Here I have one more query.
Does the pre market ordered prevails over the pending orders of last day. I mean what we bid after market
Basavaraj Tonagatti
Dear Reena,
NO.
Srikanth
Hi, I have understood very clearly on the four scenarios. I have two questions.
1. Apart from these four any other scenarios are applicable for the calculation of Equilibrium price?
2. Is share price only only increase when buy happens or any other source that affect for raise?
Thank you for the Help.
Basavaraj Tonagatti
Dear Srikanth,
1) NO.
2) It depends on DEMAND and SUPPLY.
Srikanth
Hi
Thank you so much for quick response. So Demand means Buy and Supply means Sell?. If not , can you please explain?
Basavaraj Tonagatti
Dear Srikanth,
Yes.
Sushant K.
Hi, firstly I sincerely thank the author for this post and easy explanation, I really appreciate your efforts, I will come back again and again to check for updates on this blog. But I have a small request will you please share the source of this information?
Basavaraj Tonagatti
Dear Sushant,
It was available on NSE (I am not sure about now).
Tarun Verma
Sir, I didn’t understand the concept as the images you quoted are not visible. Please, if can check it once more.
Thanks in advance.
Basavaraj Tonagatti
Dear Tarun,
I think it is resolved now. Please have a look and let me know if you still facing this issue.
Anurag Garg
Beautiful explanation.. Cleared my long pending query!! I think that I will be visiting more often!!
Keep enlightening the people.. A lot of us need it. 🙂
S P GOPINAATH
Can we place the order for option in premarket session?
Basavaraj Tonagatti
Dear Gopinath,
NO.
Subhash
You have explained it as simple as possible. Your effort is greatly appreciated. Thank you very much Sir.
Basavaraj Tonagatti
Dear Subhash,
Pleasure 🙂
Akshay
https://www.nseindia.com/live_market/dynaContent/live_analysis/pre_open/preOpenOrderBook.jsp?param=MANPASANDEQN&symbol=MANPASAND
In the above scenario of pre-markets order session dated 12July 2019 for MANAPASAND BEVERAGES the buy price of Rs. 35.50 @ 1750 quantity will be executed at what price?
Basavaraj Tonagatti
Dear Akshay,
I can’t track individual price.
akshay
In general what happens to BUY orders that are placed above equilibrium price
Basavaraj Tonagatti
Dear Akshay,
It is already explained above.
Utkarsh mittal
Sir from where we can see this table on our broker,s platform ???
Basavaraj Tonagatti
Dear Utkarsh,
These tables may not be possible to see. However, I explained to you how it works.
Ratan
1. In scenario 2 quantity of demand and supply at 99 is the same as in scenario 1. This could be an error which has been corrected in scenario 2. I understand during pre-open only market orders can be placed. Then how do you match demand and supply at different price levels?
Basavaraj Tonagatti
Dear Ratan,
Please read once again the scenarios properly.
Nilesh
I don’t understand how you get 36500 as demand and 12500 as supply in last row 4th and 5th column of 1st example.
Basavaraj Tonagatti
Dear Nilesh,
They are just examples to show.
Learning market
Dear sir if i place a limit order of a stock at price 500 but seller puts limit order at 480. Then at what price trade would execute?
500 or 480?
Basavaraj Tonagatti
Dear Learning,
If there are matching seller order for Rs.480, then it will get executed but not at Rs.500.
Gowrishankar
Can you explain more on order book and demand/supply
Basavaraj Tonagatti
Dear Gowrishankar,
What is your doubt? Because ORDER BOOK and Demand/Supply is the simple concept.
vansh
sir any chart or broker who provides pre market price and candle too?
Basavaraj Tonagatti
Dear Vansh,
Sorry, I don’t know.
Jignesh Patel
Dear Basavaj,
Could you explain the difference in buy and sell quantity versus demand and supply quantity?? Also, What is the importance of buy and sell quantity in determining equalibirium price? Also, What is a “At the open (ATO) orders and how they help in driving the market in active trading session??
Thanking you in anticipation.
Vishal
Sir , Please suggest on the below scenario :
I wanted to buy 500 stocks of cummins ind on 1st aug.
I had placed buy at market order at 9.05 am and the stocks were not bought.
Instead stocks were carry forwarded to open market with limit of 680 ( which was the decided equilibrium price at pre open market ). Do you think this happened due to low volume ?
Thanking in advance for your help.
Basavaraj Tonagatti
Dear Vishal,
It may be.
Anil
Thanks for explanation, please let me clear how can we can anticipate the price in pre-market session, or its simple luck by chance if order get executed. if there is any good or bad news of stock so how one can decide as to which price stock will open.
Basavaraj Tonagatti
Dear Anil,
Yes, you can anticipate but alloting the stocks during pre-market is completely on demand and supply.
Shreekant
What is unmatched order here?
Basavaraj Tonagatti
Shreekant-Orders which are not matched.
shreekant
Is there any way to get the total number of unmatched orders during that period ?
Basavaraj Tonagatti
Shreekant-It is hard to find through broker. You can knock NSE or BSE to fetch that data.
Omkar
Is there a pre and post market session for Futures too ??
Basavaraj Tonagatti
Omkar-NO.
Arjun
Sir can any individual or retail investor as small as 100 shares can be placed order in pre open market ?
Basavaraj Tonagatti
Arjun-YES.
C V REDDY
Dear sir
By the time 3.30PM to GNFC closed at rs414/-. But 3.31PM it changed to 401.95. Why that sudden change. Normally to get Rs3.00 change thousand of share to be traded.
Basavaraj Tonagatti
Reddy-Check with your broker.
vivek anand
this happened because in post market order i.e from 3.30pm to 4pm there were buyer and seller who traded at the price of 401.95
Vishwesh Dhamdhere
1. Is demand & supply is based on buy & sell market Order?
2. What is the difference between buy, sell order & cumulative buy sell order in pre-market?
3. Why bids is greater than offer in pre market?
Basavaraj Tonagatti
Vishwesh-1) Not market orders but during Pre-Open Session.
2) I am not sure of cumulative. May I know the details of the same.
3) Because there are someone to buy and sellers look for higher bidders.
Vishwesh Dhamdhere
Buy, Sell Order & Demand, Supply Order what are the difference?
Basavaraj Tonagatti
Vishwesh-Demand and Supply orders are not there at all. It is only buy and sell orders which fluctuate based on demand and supply.
Vishwesh Dhamdhere
Why volume & limit quantity is high after 9.08 in pre-market
Basavaraj Tonagatti
Vishwesh – It’s not high but shows all pending orders.
Vishwesh Dhamdhere
Ok ok got it. Sir I’m a intraday trader I always follow pre market strategy. I have little more doubts can give u share Ur no.
My number :- 8850609088
Basavaraj Tonagatti
Vishwesh- But sadly I’m not an expert in intra day trading.
Ankit Jaiswal
If Market Orders quantity is greater than unmatched tradable qty …
How remaining market orders will get execute which are placed in pre-open session.
Basavaraj Tonagatti
Ankit-As per me, they will be turned regular orders after the pre-open session closure.
Dipu
Nicely explained thanks
Saurav Gulati
Can you please tell me about minimum amount required to buy nifty future in intraday trade.
Basavaraj Tonagatti
Saurav-Check with your broker.
Sripathi
Dear Sir,
I would like to view the past Pre-Open Market data by date wise. Any possibilities to get this.
Please help me in this regard.
Basavaraj Tonagatti
Sripathi-Contact the NSE or BSE.
Sripathi
Thank You Sir…..
Sumit singh
HELLO BASU SIR !!!
Can you pls help me with this !
At what price i should bid in pre open market.?
Can i bid at any price in the upper &
Lower circuit range?
And why do previous close price & next day’s opening price is different?
Does it is only due to the equilibrium price calculation or there are some other reasons?
Basavaraj Tonagatti
Sumit-At what price I BID-It is purely your call. Price difference is due to equilibrium price calculation.
Dwijesh
Hello sir I would like to know where can I get this premarket data does anyone provides this because I need the quantity of shares traded in the premarket session which is responsible for a gap up or gap down.By knowing that one can predict if it’s a real or just an anxiety move since some stocks might be oversold or overbought because of certain news but the performance of stock might not reflect the move and there may be a chance of gap filling. It would be really helpful if you could tell me where I can get this since I trade on zerodha they don’t provide this. Even Amibroker with its feeder doesn’t provide that or if there is any setting which I could change on amibroker such that I get the volume on the premarket data please do tell me thank you.
Basavaraj Tonagatti
Dwijesh-You can knock the NSE or BSE for the same.
Raj
Hello,
As explained by you in above cases for example case 1 where 105 is the equilibrium price of the share,then when the market opens at 9.15 is 105 going to be the opening price?In short is the pre-opening equilibrium point also the opening point at 9.15?
Also, is after hours trading don in india?
Basavaraj Tonagatti
Raj-This is what I already explained in above post.
John
You only explained the defination of pre-open session here, I beleive. Could you please tell us how should this be taken for the entire day intra-day. I mean if the pre-open session was mostly selling, will only selling happen throughout the day for intraday or viceversa?? What’s the importance of pre-open session for intraday?? Please share your valuable honest opinion per your intraday/stock market experience! thanks
Basavaraj Tonagatti
John-Pre-Open session will never ever be the indicator of market day. It may or may not be. Hence, do investment or trading as per your plan but not relying too much on pre-open session.
Rajasekhar
What is the difference between order book and demand & supply qty.
Basavaraj Tonagatti
Rajasekhar-Order book is a book where the orders are entered. Demand and Supply is based on the type of orders booked.
amresh kumar awasthi
thank you sir
Prakash
Is there a way to know the actual demand and supply at a given point of time?
Basavaraj Tonagatti
Prakash-During Pre-Open Session?
Prakash
Any time – including pre-open.
Basavaraj Tonagatti
Prakash-It can seen live. Check with your broker application.
Feelthemarket
A very nice blog which clear lots of doubts. Few questions to ask you if you please clear the doubt
1) Suppose a HNI trader with 50 crores capital wants to trade a script which is has closed at 200 previous day.Obviously his volumes will be more. So what will be his ideal strategy to fill the orders quickly AMO or Pre opening session?
Basavaraj Tonagatti
Feelthemarket-Hard to say as it depends on that day’s demand and supply.
Davidroy
Is there any data available where ALL ( not only my account) pending orders for a specific stock are given ?
Basavaraj Tonagatti
Davidroy-Check with your broker.
Raghu
Great article!
Few questions.
1. Let’s say I place an order in premarket, when do I find out if it gets matched?
2. If it does get matched, will I know the price?
3. What other info do I get? (for example, is it possible to glance at the book before market open?)
4. And most importantly, if it doesn’t get matched, does it roll over to market open? Do any orders rollover to market open?
Thanks!
– Raghu
Basavaraj Tonagatti
Raghu-If it matched, then your order get executed. You can’t see that back end process.
Gangadhar
Hi Basu,
I have few doubt about circuit limit
Recently i observed that Indiabulls share price raised by 50% in a day, Adani enterprises raised 27%, Divi’s lab dropped by 24%, how can this happen as they fall into the 20% price band.
thanks
Gani
Basavaraj Tonagatti
Gangadhar-Do research on these stocks which either goes up or down drastically, you noticed that circuit limit acted. Just search some news items related to these.
PaagalTrader
Circuit limits are not applicable on stocks in Futures & Options.
Basavaraj Tonagatti
PaagalTrader-Not applicable to stocks??
Yatish
Correct, circuit filters are not applicable to stocks which have derivatives e.g. futures and options. Remember SATYAM ? 80% fall in a matter of minutes, so be careful. Happy trading.
vivek+anand
for F&O stocks circuit limit is different
Deep\'s
what does 3 min of buffer do?
Does it perform specific task other then facilitates transition from pre-open to normal market session?
what exactly happens in this 3 min of buffer period in pre open?
Basavaraj Tonagatti
Deep-It is price adjustment at internally and getting ready for market opening.
Deep\'s
what does price adjustment means?
i mean in what manner the adjustment is done?
Basavaraj Tonagatti
Deep-It is at server end.
Gangadhar
Basu i have new doubt,
per my understanding whenever a script breaches the circuit limit within bse prescribed hours trading will be halt for 15 min(2pm), 30 min(1pm) and 45 min(11am). after each halt the equilibrium price determination process repeats
pls ref bse website and circuit limit field, pl confirm my understanding is correct or not
Basavaraj Tonagatti
Gangadhar-I am not sure about circuit breaker rules during market timing. But what I am explaining here is about Pre-Open.
Gangadhar
Basu,
1.GTDC stands for good till date, this option is available for some scripts in BSE and we can put order validity upto 1 month for both sell and buy, but am not sure whether unexecuted order will be taken for pre-open session next morning or not, but it will be taken for regular market b/w 9.15-3.30pm daily upto 1month
2.if i have demat a/c with 1 broker can i trade with different broker and transfer shares to my 1st broker demat a/c, because some firms provide less brokerage but not sure about long term guarantee
Basavaraj Tonagatti
Gangadhar-1) I am not aware of that.
2) Yes, if the ownership is same then within different demat, you can transfer stocks.
Gangadhar
Hi Basavaraju,
1.May i know when will be the circuit limit for each script fixed
2.As the circuit limit for all scripta is 20% during pre open sesson, if i place the order at +20% and if the circuit limit for that script is fixed to 5% how it will be transferred to regular market
3.If i place the GTDC order after market hours will unexecuted order be considered for pre open session
4.If i place the order before 9.00am will that be taken for pre open session
thank you very much for your time,
Best regards
Gangadhar
9686570238
Basavaraj Tonagatti
Gangadhar-1) It is fixed by NSE based on the script considering many aspects like liquidity and volatility.
2) It is script specific.
3) GTDC stands for?
4) You are not allowed to place before 9 AM.
Arjun
Hii, I’ve got a question sir,
1. Their r two types of orders, after market order n pre open session order; whats the advantage of them over each other?
2. If i want my order to get executed at highest odds, what precautions shall i take? (ex. Place order at most probable price point or place order as early as possible, as soon as pre market session starts?)
Basavaraj Tonagatti
Arjun-1) Is it during Pre-Open session?
2) Probability is not known to anyone. Then how can you judge?
Hansmukh Jain
1. If two people have placed buying order at same price, Which order will get priority to be matched if supply is less than demand?
2. Which order get priority to be matched, limit or market order if at limit price order, supply is less than demand?
3. Which order have high probability of execution?
Thank you for sharing excellent article.
Basavaraj Tonagatti
Hansmukh-1) Both if punched to be exactly at same time then for market it is considered as ONE order but not two orders.
2) There is no such differentiation, if market order and limit order at same price then they treated equally but based on timing the priority will be given.
Ranjit Ekka
sir one small doubt. often my stop loss order is executed much above the feeded price as input during intraday trade. for example , for SBI as scrip I have ordered Stop Loss at Rs. 235.00 but the Stop Loss order gets activated at price say Rs. 238.00, many a times it has happen to me. Please help.
Basavaraj Tonagatti
Ranjit-Check with your broker.
Naeem
Could you please put opening sessions of BSE and NSE differently, also elucidate the closing sessions. Thank you so Much!!!
Basavaraj Tonagatti
Naeem-Pre-Open session works same way for both NSE and BSE.
Sahil
Sir,
After the selection of “Equilibrium Price” which orders are given the priority
(i) The Market Orders OR
(ii)The Limit Orders – Here the Limit Orders I am talking about are the one which ultimately decided the Equilibrium Price i.e the ones with maximum tradable quantity. Here as the limit price of these orders equals the new market price
which type of orders are completed first?…. (i) or (ii).
Basavaraj Tonagatti
Sahil-Once the equilibrium price identified, then there is no difference between market order or limit order. The orders get executed based on FIFO format.
abhishek
Hey… Whether can we short-sale any stock in pre open market? Pls reply me
Basavaraj Tonagatti
Abhishek-Yes, you can.
abhishek
Hi
I asked same question on fb page you replied NO! I am confused!
Basavaraj Tonagatti
Abhishek-I updated the same reply in FB. Check.
abhishek
Hi,
Today I tried to Short sale State bank of Mysore, but it doesn’t happened! Why?
Basavaraj Tonagatti
Abhishek-I am not sure of why it not happened. Also, it depends again on equilibrium price.
abhishek
But, the thing is it has rejected the transaction! so no question of equilibrium price!
Anyways thanks for the reply man!
Basavaraj Tonagatti
Abhishek-But as per rules, it must. Check with broker !!!
Debayan Sen
Sir, i have a question. If i place an order in pre-market session then can i get the shares at market price or do i have to use limits?
Basavaraj Tonagatti
Debayan-If they executed as per the market price, then it will be at market rate otherwise at limit price.
rahul
is it good to invest in penny stocks using delivery mode through zerodha because zerdoha not charge on delivery as compare to other brokers?
Basavaraj Tonagatti
Rahul-Zerodha may be offering NO CHARGE on delivery. But are they guaranteeing you on profit or safety of your money? Act as per your risk.
aksuvarna
Hi, i think no broker gives guarantee on profit.. and regarding safety of Money… our money in our account or in form of stocks.. where does it go? Pl clarify
Basavaraj Tonagatti
Aksuvarna-Where does it goes means?
rajesh
can i buy shares on 9 Am and sell at 9:30 Am ???
.
.
should i get share on yesterday closing price ??.
.
.
thank you
Basavaraj Tonagatti
Rajesh-Yes, you can place the order. Once it matches the opening price, then it get executed based the priority. Then you can sell the same at 9.30. No, you will not get the share at yesterday’s closing price.
rajesh
thanks sir. i have one more query regarding to this.
i will get stock at open price. And suppose it comes down than open price at the end of the day but its more than the previous day closing price. then whose profit is this. is it my profit or company profit. i m asking about intraday shares.
.
.
thank u .
regards- rajesh
Basavaraj Tonagatti
Rajesh-If you bought the stocks (whether it is at market price, open price or the price you bought at), the profit and loss are purely YOUR’s
Chandan
I am little bit confused. I have following quaries
i) Am i eligible to place an oreder with market price (instead of Limit)?
ii) If so, once the equilibrium price will be set as per your algorithm, the orders will be executed?
iii) How the traded quantity calculated whether it is based on the pending orders or previous day’s traded quantity?
Thanks in advance.
Basavaraj Tonagatti
Chandan-1) NO. 2) You don’t know the market price for the day, hence how can it get executed? 3) At what point?
Panduranga Kamath
Sir, Thanks for helping investors. Can I place After Market orders in Futures?
Basavaraj Tonagatti
Panduranga-Not allowed.
Surendar
Futures and cash segments are allowed in After market orders.
Only in pre-open sessions cash segment alone is accepted.
Basavaraj Tonagatti
Surendar-YES.
Rajnish
So what happens if my quote is below or higher than the equilibrium price.
Basavaraj Tonagatti
Rajnish-It will not execute.
Karan
hi buddy,
So i want to ask you a question here, this means it is a very rare possibility that my order will be executed. i mean what are the chances here that i quote exactly the equilibrium price.. am i getting it right?
Basavaraj Tonagatti
Karan-YES, you may say so.
Karan
In that case, why do investors/traders even bid or place orders in a pre market session, i mean, what is the point , its like winning a lottery – right? if i am wrong please correct me and explain me sir.. confused on this.
Basavaraj Tonagatti
Karan-Trading is winning the same right?
Rohit
Sir news channels shows nifty movements around 6.30 to 9am, that shows nifty is up or down. How can we see them on any other website or applocations before pre open .how news channel knows all this before 9am.
Basavaraj Tonagatti
Rohit-Only GOD knows of how they show the movement. All it matters is TRP to them but not your moeny.
tanmay
They check SGX Nifty….God doesn’t tell them…
a
Please upgrade yourself b4 acting as a subject matter expert
Basavaraj Tonagatti
a-Please let me know which knowledge I have to upgrade 🙂
rajsekhar
Hi sir i have a question from this article.
In case-4 what would happens to the orders placed at 101 and 99 when previous days closing price 100 is considered as equilibrium price or call-auction price? Will they be going to the open market?
Basavaraj Tonagatti
Rajsekhar-Previous day’s close is exactly in same distance from 101 and 99. In such situation previous day’s closing price is the equilibrium price or call-auction price.
Naren Das
Nice article. Let me ask a question. Some sites advocate the application of the Chandelier exit by setting your stop upon entry at a multiple of, generally, 3 times the Average True Range (ATR). The ATR at entry for this trade is sitting at 0.0122. So they have calculated ATR as 3X122 pips=366 pips and have the initial stop at 366 pips lower. Now let me know how to calculate for the Indian stock market? What should be the equivalent of pips in the Indian stock market? I hope you would kindly help me.
Basavaraj Tonagatti
Naren-I am not aware of this.
Prasath
Does market orders get executed during pre-open session.
Basavaraj Tonagatti
Prashanth-Yes, if the market order is the pre-opening price.
raja rao
Very nice article looking forward to know more very many thanks sir
Kantibhai
Excellent explanation Sir,Today i understand concept of Pre-opening .
Thanks a lot
Alagu
Hi!! Thanks for the information. I am very new to the technical terms in the market. So, my question may be naive. My question is I want to buy a stock xzy. The closing price yesterday was 100. Just imagine the lower and upper circuit for the stock is 20%. I strongly believe the stock will move to 115-120 range after few minutes market opens. Now, i want to buy the stock at better price anywhere between 100-110. If I want to place order during pre market session (i.e between 9-9.08 am), how I can choose the price? any random price between 100 and 110 or the better price (for example 105) will be shown any where in the broker site (in my case ICICIdirect)?
Thanks
Basavaraj Tonagatti
Alagu-Random price.
Alagu
Thanks
Pankaj
So, the Equilibrium Price could be higher/lower than the pre-open price(which we get at 9:08 am) of a stock. Please correct me if i am wrong …
Basavaraj Tonagatti
Pankaj-YES.
Lohit
Sir thank you for the great article!
Can I place after market order at market price so that it can get executed at equilibrium price. For example, Infosis results are out and it was excellent, last closing price was around 1162, I anticipate it to increase on Monday. To avoid gap when placing limit price, can I place a AMO at market price and by placing market order will I get best price around the equilibrium price.
Basavaraj Tonagatti
Lohit-How you know the market price of the day’s start during pre-open session?
jatin bhatia
Sir,
Can we place Buy/Sell orders in FNO segment too during the Premarket session?
Basavaraj Tonagatti
Jatin-NO.
vikas
Minor typo – Scenario 2 supply Qty for share price is incorrect in figure. Should be 27500 instead of 12500. Great article otherwise. I have 2 questions as well. Do prices move in the same fashion in regular session as well? 2nd – Where can the order book details be found?
Basavaraj Tonagatti
Vikas-Thanks for finding error 🙂 1) Yes, the prices move in same way. 2) You will not get that information during trading time.
Jji George
Dear sir,
Please tell me Pre market orders are possible for all stocks or only index stocks.
Basavaraj Tonagatti
George-For all stocks.
priyabrata hazra
In the pre market orders what will be the mode of Product Type–margin, delivery, mif or ptst.
Basavaraj Tonagatti
Priyabrata-It may be anything. You can buy it either delivery or margin.
Sam
IS there any way to carry forward my last day selling order to next day in NSE?
Also what strategy should i adopt to exit from a stock which is going in lower circuit from past 4 days?(Every days some 3000 sell oders is bring the stock to LC)
I want to place a request in a such a way that it get executed first in NSE as NSE will place first come/first serve basis
At what time/what method should i adopt so that NSE will take my orders first?
Basavaraj Tonagatti
Sam-No, you can’t carry forward your selling order. The order expires after the market closure. It is hard to guide as to what you have to do with the stock which is trading at lower circuit. It is purely your call of buying. Hence, can’t guide the strategy to SELL from my end. It is everyone’s dream that their orders MUST execute at any cost. But it will not happen like that. Because it is market driven by many of like you and me.
sam
Also just want to know whether any benefit is there for placing selll limit offline order one day in advance instead of giving in pre open session on the same day?
Basavaraj Tonagatti
Sam-NO.
sam
Can you please guide me the link wherein I can see pending sell orders/Buy orders for a stock which is in UC/LC?
Basavaraj Tonagatti
Sam-Check with your broker.
shariq
Good morning sir, if a stock closes at 55 rs and in pre opening session it is at 56 or 57 (9:06 am) and I want to buy 500 stocks at the same time, so can I purchase it?
Basavaraj Tonagatti
Shariq-Please elaborate more about the situation.
shariq
Sir like we purchase stocks after stock market gets open is there any way like that to buy stocks in pre open session
Basavaraj Tonagatti
Shariq-Yes, and it is based on price mechanism I explained above.
shariq
Sir, can you tell me name of some broker’s from where I can do trading in pre open session
Basavaraj Tonagatti
Shariq-All brokers provide this facility. Do remember that trading means you have to buy or sell orders. Based on price mechanism your order may get executed. Please read above post about how the orders executed during pre-open session.
aditya
Please let me have your help here.
I understood the process Pre Open Session as you have explained. However, one question that I have is whenever I place an order to buy or sell any stock at market price instead of limit order during Order Collection Period then I suppose my order will be considered in or as equilibrium price. Is that correct?
Basavaraj Tonagatti
Aditya-I am unable to get you.
Akhilesh
Sir i m having same doubt. Whether we can place buy order at market price instead of limit price in pre-open trading time I.e 9:00 to 9: 08 , so that my order will be executed with opening of market.
Thank u
Basavaraj Tonagatti
Akhilesh-Can you elaborate more?
sunny
Sir
What are sell & buy in order book column in excel. IT IS NO. OF ORDERS OR QUANTITY?
Basavaraj Tonagatti
Sunny-Number of orders.
manus
Dear Sir, I have identified one scrip. My observation is that it definitely goes HIGH from it’s that current days OPEN price. Suppose I want buy that share in the morning with stop loss order but no higher selling price target, what time I should place order? If I have to place buy order what price should write in buying price place in tradetiger to get confirm order? If I put yesterday’s closing price will I get order? If it gap opening at higher price then I can not decide price. I am confused. But I am sure it goes definitely higher from open price except for few days. Please guide me.
Basavaraj Tonagatti
Manus-If I know that then I may be called as GOD.
manus
No sir it is not like that. If u give me ur e-mail address I can send u excel file with my observations. U have to tell me my thinking right or wrong. U have to guide me. That is all.
Basavaraj Tonagatti
Manus-You can send mail to tonhokrani@gmail.com
Sreeni
Hi sir,
I have done MBA after BSc , currently working for an Investments firm(2.5 years of experience into BPO finance operations). I am planning to do Certified Financial Planner course. Is it a right move. if so what would be the career as CFP and also can u suggest some good Institutions in Bangalore. Please let me know the course duration and expected fees for it. Thanks in Advance.
Basavaraj Tonagatti
Sreni-It is good to know that you are interested in pursuing CFP. There is a huge scope for it. As far as institutes, I did my CFP under my mentor Mrs.Padmalochini who not associated with any institutes, but handles the classes individually. Institutes only care for you up to the time of your fee payment. Later on they not bother whether you completed or not. Hence, I suggest to follow her. If you need her contact details then mail me at tonhokrani@gmail.com.
manoj chandra
Hi Sir,
I bought nitin spinners at 1408@ 73 and due to upper cicuit it went till 103 and now its on lower circuit and has fell to 81.90. im placing a sell order everyday and my order is being pending as there are some 3 lakh pending orders, today my sharekhanbroker has told me i should place order at 11pm in the night i.e premarket session, i dont knw if this is true or not…is he fooling me?? I need to sell my stock at any cost before it crosses my buy price. so tomorrow is the day and i need to place an order….plz help me! do i need to place an order at 11pm tonyt or 9am tomrw morning….i have calculated the price fall since the last three days…its 4.75 fall one day,next 4.5 and today it fell 4.2….so by this trend im assuming it will fall 4rs tmrw, i need your suggestion at which price shall i place the order and at wat time i should place…manoj4cinema@gmail.com is my email id, plz kindly help me with an advice as early as possible
THanks a lot in advance
Manoj Chandra
Basavaraj Tonagatti
Manoj-I am not an expert of direct equity.
Raj
Dear sir, Nice to see you replying all the queries. I have a question. I am using investing.com for nifty and banknifty Future chart. In that i’m seeing candles from 6:30 am to 9:15 am and then normal market hours candle. how is it possible in Future sir?. Kindly see the investing.com streaming chart, you will see the above info. please let me know your thoughts.
Thanks
Raj s
Basavaraj Tonagatti
Raj-I am not sure how they are showing price movement of a chart after market closure. As per me, the new movement starts from 9.15. Raise the same with your broker.
lalit bareja
dear sir please tell me from where I can get all the entered orders in any particular script like when we checking on nse pre market page it only shows buy qty and sell qty ato and total if I want to check all enterd orders with al the rates in pre market. I mean want to get all the pre market order detailed summary
Basavaraj Tonagatti
Lalit-Contact your broker.
sreenivasulu
Hi sir ,
I have one doubt. if previous close of x share is 100rs. So i have placed an order of 10 shares at 100,and it goes down(say 98) in pre open session. So i wanted to cancel it before 9.08(end of pre open session). is it possible to cancel or as soon as it reached 100 it is excecuted. please explain briefly
Basavaraj Tonagatti
Sreenivasulu-You can not modify orders after 9.08.
sreenivasulu
Thanks for your reply. Actually I am not modifying. I placed an order at 9.01 or earlier but in pre open session Stock price is going down and i could notice it at 9.05 (still 3 minutes to end pre open session) so can i cancle it before 9.08(say at 9.06 or 9.07) or it would have been excecuted already
Basavaraj Tonagatti
Sreenivasulu-You can cancel or modify the orders before 9.08.
sreenivasulu
Thanks
Amit
Hi,
I have a question. In the BSEIndia website when I checked Bharati Airtel price in todays trade it dispalyed as follows
Previous Close : 413.70 Open : 427.00
Why there is difference in Previous close and open price ?
Any information on this would be appreciated
Thanks
Basavaraj Tonagatti
Amit-When trade start today and there are huge buyers then automatically the first trade get executed at higher price (in your case it is Rs.427). So it shows the difference. At the same time, when there is a huge sellers then the price will automatically goes down (like 310) also.
Nikhil
I have one small doubt, consider a company xyz
SYMBOL qty EP Prev.CLose
XYZ 5000 100 90
I am a little confused with the qty here, does it state 5000 shares have been traded for this stock at EP?
Thank You
Basavaraj Tonagatti
Nikhil-Please provide the exact stock name and format of which you have confusion.
Nikhil
Like say for today 5th of Aug 2015 Preopen market of TATASTEEL is like
EP: 260 %Chng:1.44 Prevclose: 256.30 Qty :13,516
Does this mean 13,516 shares have been traded for the Ep price. *EP being equilibrium price*
Can yo please let me know the role of QTY in Premarket sessions
Thank You
Adarsh
Its very nice article, i m novice in the stock market, your article made me understand the pre market session, but i have a doubt. i have a sell order in the day market at the closing price at under price(friday), due to less demand it could not get executed. but i could see the price after 3.30 has appreciated beyond expectation. my question is that can i place pre market order to sell on monday market for the same stock?
Thanks basavaraj in advance.
Adarsh
Basavaraj Tonagatti
Adarsh-Yes, you can place it.
harsh garg
sir, what is your view on hero motocorp after today’s fall. is it increasing in this month ?
Basavaraj Tonagatti
Harsh-I am not a trader.
Dhaval
I learning share market last 6 month I want to know how can I know premarket buy n sell price. So I can buy or sell stocks.
Basavaraj Tonagatti
Dhaval-It is already explained above.
vishal
Hi Basavaraj ,
I have placed the Buy order of 500 shares at 59.75 . the market was about to close . so my order was partially executed and executed quantity was 100 . But the strange thing is the share closed at 59.65 . I mean how can it be possible ? Will my remaining quantity go to pre market session next day ? Kindly clarify .
Basavaraj Tonagatti
Vishal-Punching at server of NSE or BSE makes this difference in execution. No, it will not carry forward the order. It is considered as lapsed order.
vishal
Thanks a lot for replying . But still its difficult to understand that my order is already partially executed at 59.75 which means my order should be considered first as a buy at this price on the first come first serve basis .
So , now the question is if my order was already there at 59.75 , how can the stock reached the 59.65 level without fully executing the partially executed order at 59.75 .
This is total strange and my money is blocked for 500 shares instead of 100 shares. I am not understanding it .
vishal
The concerned Stock here is Kopran. You can check at what price it is closed at NSE .
Basavaraj Tonagatti
Vishal-If the money blocked for 500 stocks then it is purely wrong. I think you check the DP statement. If the money blocked then in my view orders executed.
Jvain
Hi,
I checked Pre-Open Order Collection for NSE at http://www.nseindia.com/live_market/dynaContent/live_watch/pre_open_market/pre_open_market.htm. When I click on any scrip it tells me me buy QTY, Price and Sell QTY. and finally it shows Pre-Order Collection summary. I am unable to follow your instructions above in those examples and IEP is something different. Can you please explain how the aggregation works in buy and sell qty? I think that is one of the parameters for deciding the price.
Thanks
J
Basavaraj Tonagatti
Jvain-Check while market is in pre-open session and you come to know the applicability of above theory.
sanket
How this will work if there is no quantity on any equal buy and sell price.
Basavaraj Tonagatti
Sanket-If there is no selling or buying order then the order will not execute. To say in a different format, we must have buyers or sellers for trade to take place.
madhur
i think there is mistake in scenario 2
Basavaraj Tonagatti
Madhur-Please let me know why you felt so?
Rohit
Is this the reason…if the stock is up 5% in pre-open…as soon as the market opens…the stock goes down….
Basavaraj Tonagatti
Rohit-It happens…watch the movement of few stocks.
Milan Bhogayata
Hi Tonagatti,
Very Nice Article and helpful for Traders…..
One question confusing me that…. if Order will excecute after 9:08 AM, then why NIFTY and SENSEX Keep Changing from 9:00 AM to 9:15 AM Continue in Up/Down Pattern with huge Difference.
What is the Reason for that…. ?
Basavaraj Tonagatti
Milan-Please notice. After 9.08 it will not change.
mohammed
Nice article..feeling great..
but neeed some more clarification,..
1.how pre open market is helpful?
2.how to decide the trend upside/downside based upon preopen market?
Basavaraj Tonagatti
Mohammed-1) I am investor and for me it does not matter. But for traders it make sense to judge the future course of rate. 2) You can’t predict.
deenu
very good article, thanks for updating my knowledge
Boka
Great writeup. What a way to shaft innocent derivatives holders. The pre-open session has been the biggest fraud heaped on unsuspecting traders of NSE/BSE. I don’t understand why dalal st. crooks are allowed to benefit from gap openings and retailers/small investors always lose. SEBI is very much a party to this institutional fraud. We have the same round robin trades throughout the day. Indian markets are no longer Indian.
Basavaraj Tonagatti
Boka-Thanks for your views 🙂
Vijay
Hi Bavaraj,
Is this applicable to FnO also? One more query…where does this demand and and supply came from?
Basavaraj Tonagatti
Vijay-It is applicable to equity but not to F&O. Demand and supply will come from the sellers and buyers who place the orders.
Investor
I saw many days that NIFTY price changes at 9AM itself (you can see that on CNBC TV 18 too). How can this be? The market has to discover price from 9:08 to 9:12 right? How come price changes at 9AM and further changes at 9:15 AM?
Basavaraj Tonagatti
Investor-Don’t check CNBC or any news channel. Instead either check your trading terminal or NSE site itself.
Sachikant Bhisane
Thanks for a very nice article. One question to you Sir. For an equilibrium price , where demand is more than supply, few people will not get shares. How it is decided who will get shares and who will not..? Who decides this.? Thanks,
Basavaraj Tonagatti
Sachikant-It is again who placed the order at first and decided by exchange as it will have data with timing.
Nisar
Hi Basavaraj,
Do you know any link where we can get archive data for opening pre session qty. I feel this is the
deciding factor how share is going to react whole day.
Regards
Nisar
Basavaraj Tonagatti
Nisar-I am not aware of such data. But if possible you can try with NSE or BSE.
utkarsh
Really Good Article..
Dominic
Really good article..
How is it beneficial to know about the Pre Market as by the time trades get confirmation so do the price too may get changed (i believe,may be i am wrong) of an xyz company?
what is After Hours Trading Session?
Are stocks gets manupulated by big investors? As they buy in huge quantity and sell them off as soon as posible
i am a rookie..please can u suggest somthings more things to gain knowledge that will be really helpfull
looking forward for your answer
thanks
Basavaraj Tonagatti
Dominic-Pre-Open Session will give indication. Regarding After Hours Trading Session, you find wonderful explanation HERE. Yes sometimes they get manipulated. But there is something called circuit breaker to stop such huge manipulation.
Vimal
Sir, If I place a order in pre-open Market for buy xyz share in Rs. 100 and the equilibirum price comes Rs. 95 than on which price my order get executed. If my order get executed on Rs. 95 for which i had bided for Rs. 100. please tell Rs. 95 shall be debited or rs. 100 shall be debited from my account.
Basavaraj Tonagatti
Vimal-Amount will be always debited based on executed price.
Mahesh Vakharia
With due respect to you Sir,
Since last one week I am putting my buy order for Aimco Pesticide at 5% Upper Circuit Limit , but My order NOT GETTING EXECUTED . What is the mechanism , why my order is not getting execution ? I am entering at shaft 8.45am on BSE terminal . Can you please guide me how can I PUT my order atFirst , , so that I can atleast get 100 shares ?
With regards
Vakharia Mahesh
Basavaraj Tonagatti
Mahesh-The process is already explained above. For further clarification you can contact your broker.
Rahul
Hi Basu ,
Superb Article!!!!!
Could you please elaborate on Advantages and Disadvantages of Day Trading..?
Thanks in Advance.
Rahul
Basavaraj Tonagatti
Rahul-Day trading is more of disadvantages than advantages. It need a full fledged post to discuss about it. But this is my opinion.
Atanu
When I can place an order in pre=market session? Should I use AMO or can I place the order like normal (market open time) time I do?
Basavaraj Tonagatti
Atanu-AMO stands for?
Atanu
After Market Order
Basavaraj Tonagatti
Atanu-You can place orders normally either at market price or at trigger price.
Vishwas Dole
Hello
I really appreciate for the contents of article, but there are some doubts may be because stock market is new for me. I will be glad If you clarify the following doubts.
Scenario I – Order book – buy and Sell – are these quantity for a period say 9.00 to 9.12 or at a start of session.
Demand and supply quantity and Maximum trad able quantity – not clear to me, how you derived these quantity numbers.
Unmatched orders – is the difference between demand and supply? Why it can not be difference between buy and sell.
Thanks
Basavaraj Tonagatti
Vishwas-Quantity numbers are based on placed orders during that period. Unable to understand your second doubt. Please elaborate more.
mimvs
I m mechanical engineer but want to learn day trading, is there any job about trading
Basavaraj Tonagatti
Mimvs-Do you know the risks involved in day trading??
Varun
Excellent Article!!
Can you please elaborate on “Price band of 20% shall be applicable on the securities during pre-open session.”
Basavaraj Tonagatti
Varun-I don’t think it will be applicable during pre-open.
Ananth
Hi,
Very nice article. Is there any partial execution happens in pre-open market? If yes, Premarket partial executed market orders, what rate it will be executed in the regular market?
Basavaraj Tonagatti
Ananth-Whatever partial orders will be converted to market regular orders and once price tick at that level then they too get executed.
Prasanth
Then what about market orders. How it ll get execute?
Basavaraj Tonagatti
Prasanth-Market orders are nothing but the orders executed at market price.
San
Nice article
Basavaraj Tonagatti
San-Pleasure 🙂
krishna
but why there is always a significant move in pre market as compared to normal trading sessions? and also if our limit order does not get executed in pre market , then later do we have a option to modify or cancel it?
Basavaraj Tonagatti
Krishna-It is the speculation that leads to high volatility during this period. Later part the non executed orders are considered as limit orders hence you have option to modify or cancel them.
Biplab Paul
Hi, please clarify one point during pre market trading.
Suppose i place a buy order at market price @9 AM (which shows last day traded value), does it automatically pick the market price after call auction price and execute the buy order or it waits till 9.15 am to pick the stock open price and then execute the buy order.
Basavaraj Tonagatti
Dear Biplab,
It waits up to 9.15.
sumeet gupta
Hii Basu
A very nice article
I want to know about how price band works ?
and what do you mean by buffer period ?
BasuNivesh
Sumeet Gupta-Are you asking about IPO Price Band? Then it is the decision of Issuer who decides price band for that particular issue consulting with underwriter of that issue. Basically it is based on the company valuation and expected demand. Regarding buffer period, I wrote in above post. It is the transition period from pre-open to normal market period. Hope I answered your queries.
Saravana
Thank you so much. I was longing for this . I have one question , all market orders will be executed , n what about the limit orders which are matched with decided pre open price?
Basavaraj Tonagatti
Sarvana-They will converted into normal limit orders (I mentioned the same in last lines of this blog).
D Basumatary
Can you tell me what are the risks involved in day trading. I am novice in this field