Is it risky to place market order during pre-open market?

General
1

Between 9.00 am to 9.07 am when the trade settles is it risky to place market orders?

How are the orders matched? Suppose if I place market order to buy 1 share of ABC and there is only 1 sell order at lets say upper circuit limit of that scrip, will my order be confirmed at that upper circuit price?

Also why don’t kite updates the market depth and prices during the first 7 minutes? Because on cnbc how do anchors know how much up a scrip is between 9.00 am to 9.07 am? Do they use some other terminal or source?

Because in order to place limit order I should atleast know the ltp of the scrip if placing market order is risky during the pre-opening.

3

As explained by NSE here.

This is how order matching is done.

Orders are matched at a single (equilibrium) price which will be open price. The order matching happens in the following sequence:

  • Eligible limit orders are matched with eligible limit orders
  • Residual eligible limit orders are matched with market orders
  • Market orders are matched with market orders

During pre-market there are no trades in the first 8 minutes, only the orders are getting collected and an equilibrium price is calculated and shown. If you open the market depth window, you will see the bids/asks going up and down.

1 Like
4

You mean any order if executed will be executed at only one price and everyone will basically start with 0 pnl?

5

Orders are matched and executed only if there are buyers and sellers, so at execution price P&L will be 0 only.

6

yeah depends as prices are executed only when they match up. so risk is obviously high