Pre Open Market Session in Nepal Stock Exchange Market

Many investors and traders in Nepalese Stock Market are unaware about how the opening price of stocks are calculated for the given day and that the stocks are traded even before the normal trading hours i.e. 11:00 am. Yes, the session where the stocks are traded before the normal trading hours and the opening price of stocks are calculated for the given day is Pre Open Market session. Here are more details on Pre Open Market session in Nepal Stock Exchange Market (Nepse).

Pre Open Market session is the period of trading activity which takes place just before the regular stock market session. Timing of Pre-Open Market is from 10:30 am to 10:55 am, Sunday to Thursday except public  holidays. Price range for pre opening session are +/- 5% from the last days closing price. It is how the opening price of a given stock is calculated for a particular day if traded in Pre Open Market session.

For Example:

ABC stock closed on NPR 200 the previous trading day. The price range for the stock on Pre Open Market session is NPR 190-210 [(200-200*5%)/(200+200*5%)]. If any buy order is matched with the sales order within the given price range in a Pre Open Market session that shall be the opening price of the stock for the given day. 

There are three sub sessions of Pre Open Market.

1. Order Entry Session :

It occurs between 10:30 am-10:45 am. In this session traders and investors place their buy and sell order. Orders can be modified and cancelled during this session. Orders cannot be placed, modified or cancelled after this session is over.

2. Order Matching Session :

It occurs between 10:45 am-10:50 am. In this session orders are confirmed and matched. In addition opening price of stocks are calculated and quoted in this session.

3. Buffer Session :

It occurs between 10:50 am-10:55 am. This session is used as buffer for any abnormalities in the previous two sub sessions.