Looks like Futures trading could be extended by NSE in the coming months (up to 11:55pm). How will Option premiums be affected? Will it increase, decrease or stay similar?
I think Option premium behavior will more or less stay similar - (if trading hours is extended ONLY in Futures).
And maybe Instead of looking at SGX Nifty overnight and feeling helpless, retail traders will now monitor Nifty Futures, take action, and lose more money 
option premiums should go up because the time of trading is going up.
Sellers will be fearful of a big move happening as the time of trading is increasing 25% every day. This should reflect with higher premium.
first 2 months should see a lot of slippages & mis pricings. The back tested data is going to become obsolete !
risk:reward is going to be different
most likely the margin requirement is also going to change
its going to be a chaos out there !
Is cash market being extended 25%? Then chaos - otherwise not that much!
Sorry for being a noob, but I would like to ask how is it possible for index futures to move, while the underlying market is closed? Like how is it possible for Nifty to move, while the constituent stocks are not trading? If nifty itself isn’t moving then how is it possible for Nifty futures which is a derivative of Nifty to move? I am not much knowledgeable here.
@viswaram
That was allowed by SEBI earlier too. But current NSE plan/discussion is only wrt futures I think.
Same way SGX Nifty moves overnight. Demand supply moves the market, and people i suppose guess where it should be, or they just act based on news, us markets etc. There might be edges there too, if markets goes too far from where it should be, probably some trader/investor out there makes money off it and ultimately net result of all of this is market moves towards fairer price as much as possible. This is all just speculation by me.
And you are right, there is no underlying to match and once India opens index and cash will converge.
Won’t it create big gaps between underlying Nifty index and Nifty futures? Won’t it cause sudden convergence the moment at which cash market too opens?
Nifty futures are traded based on bid/ask. It wont be based on underlying or the component stocks. And during the markets hours it will have a small discount/premium just like its now.
Just like the ES1! trades overnight w.r.t S&P500
But extending the nifty futures is good. It will give the retail traders a provision to hedge their position if there are outlier news events after the regular markets close.
And SGXNifty will become redundant
Markets are competitive. And unfair/wrong price in overnight session would mean large opportunity to make money too. This invites people to take bets and ultimately we have enough competition that edges get smaller and markets are more closer to fair price, whatever that is.
This is wrt Index Futures. Index and stocks will gap as usual today. There is SGX Nifty too and it is already moving in overnight session. Only change probably will be that we now will have the same in India too and so we can execute and whether that will change behavior of market we don’t know. Hopefully, not too much.
Having overnight in index futures is good i think, but it does lead to a bit of uncertainty in short term for traders. Will market behavior change? Should we ignore or not ignore overnight session data, even if not trading it, etc. Probably will take a year or so of data to get clearer. So many changes in last few years.
I have a doubt. If nifty futures went up, (1.5 percent within 10 to 11:55 pm), what will happen with spot price of Nifty at the next day open? Assume major Nifty 50 constituents are in red at the open.
If Nifty futures are 1.5% up than spot during the next day open.
Smart traders will short NiftyFutures and Buy Nifty Spot via stocks (as per weightage) till that gap closes down. And then they will square it off for decent profits or hold till expiry as the profits are locked in.
All these years we couldnt do it because of restriction in SGXNifty.
Now you and me can do it.
PS: i am not suggesting that this trade works. But theoretically this is how it has to be handled.
I am sure this won’t happen. This will be more like regular easy money 
