Why there is no pre-market session for futures and options?
when people seeing pre open cash market itself people have BP , SUGAR every diabetics they have .
If NSE allowed to show pre-open futures and option , people will get caradic arrest , heart attack and brain tumor , so only NSE kept hold , its falling on critical illness issue
Yeah like NSE gives a f**k about that
My 2 cent on this is Pre-market is price discovery session not a trading session. As derivatives price depends upon and should 100% be correlated with cash underling so price discovery for future and options are not required as its already covered by cash market
Pre-market session is for price discovery. And inherently, FnO are derivative product whose prices is not discovered by derived from the underlying (equity) for which you anyway have premarket session. In short … there is no need for it.
I don’t understand that since many strikes are not traded and hence there is no price for that. Price is discovered by trading doesn’t matter if it’s pre or during market
They are derivative I understand they derive price from the spot but we can see the spot price during pre market as well. I know it’s not settled but still one can check.
Price discovery in this context (of pre market session) doesn’t mean via trading. Price discovery is to determine the security’s opening price. It’s actually a call auction and the price is the point where maximum number of trades can take place based on AMO Buy/Sell orders. This goes on to determine the stocks’s opening price @ 9:15. And unless you have an opening price … no derivative price can be ascertained. Isn’t it?
What I want to say is why give the right of price discovery to the cash market only? FnO also helps in price discovery. Say if futures is trading at huge discount to spot would you not short spot and buy futures and hence narrow the gap?
Yes I know the price ascertainment process that happens but that starts from 9.00 am and we can see the price at which max orders are getting executed at any time so why keep the FnO closed till 9.15 ?
Starting at 9 AM doesn’t mean it finishes at that min itself. Because it start’s at 9:00 AM or 9:07 AM to be precise … and goes on till 9:15 AM. That’s its window. And before that you don’t have opening price but minor iterations to it …
Hope it hits home. Cheers!
I think saying futures depend on spot for price discovery is not correct. Sometimes spot price change because of changes in futures prices also.
Someone is saying they will buy/sell at 100 in one month the underlying.
While you are buying/selling at 70 today. Now will you not willing to increase the selling price in spot and reduce futures price ?
While it may seem so … Your argument has a basic flaw of confusing cause and effect. It arises, because in most general sense, Future (as the name suggests literally) gives kind of a precursor of whats gonna happen next to a certain extent and goes into premium / discount accordingly. And no doubt, it is better in capturing movement / emotion especially in liquid derivatives. However, that does not imply, it determines the cash price. They are two separate products and maintain their own books for bid / ask. Though, it is so fast with computers and HFT … they are always in tandem giving rise to the confusion who is leading/lagging - Future or Cash.
I mean on expiry difference is zero so saying one depends on other for price discovery doesn’t makes sense to me.
Expiry / PreMarket ?? We are jumping bro … Not sure what you are stuck with …
Well, great question … but sorry - I have nothing more to add.
Though, I must say … all the why’s are pretty much in the name - PreMarket (before actual trading) and FnO Derivative Products (Derived from). Maybe for sometime you have to take a leap of faith … before you dig further into FnO.
If premarket means before trading do you mean to say price changes without any trading in spot? Or are you saying trading in spot is not trading but only price discovery?
My only question why is it so hard for NSE to have pre market for FnO?
On a lighter note, I think you replied this in a different context … but the answer is the same -
And “that” is premarket session for FnO.