Starting Monday, the National Stock Exchange (NSE) is implementing a new pre-auction session, which is divided into three time intervals for order submission, modification/cancellation, and matching/execution to determine the opening (equilibrium) price.
The new pre-opening procedure applies to all equity shares in the cash market, including SME, InvITs/REITs, and derivative instruments. The total duration of the new session remains the same—from 09:00 to 09:15. However, there are specific changes in the order submission sequence, type of submission, modifications, cancellations, and the matching/execution procedure compared to the previous system that was in effect until Friday, September 4, 2026.
According to Sudip Shah, Head of Technical and Derivatives Research at SBI Securities, the main goal of the revised session is to make the process of discovering the opening price more structured and efficient, while reducing the possibility of last-minute market order activity.
Step-by-step Guide to the New Pre-Opening Session
Interval 1: Order Submission Period
According to the NSE circular, in the new session, the order submission period will be extended from 09:00 to 09:05. During this time, market participants can place both limit and market orders, as well as modify and cancel them.
In the old version, the order submission period was from 09:00 to 09:08, during which orders could be placed, modified, or cancelled. An analyst from SBI Securities believes that the first five minutes have become more significant for traders, especially during sharp overnight gaps or major news events.
Interval 2: Limit Order Submission/Modification Period
From 09:05 to 09:10, the exchange will allow new limit orders, as well as modifications and cancellations of previously placed ones. However, during this interval, modifications or cancellations of market orders are not permitted. The system may randomly close/stop in the last two minutes of the set time window.
Previously, this window for all such actions was from 09:00 to 09:08.
Interval 3: Order Matching and Trade Confirmation Period
The order matching and trade confirmation period starts at 09:10 and lasts until 09:12, after which the opening price for a specific stock is determined. First, buyers' market orders are matched with sellers' market orders based on time priority at the equilibrium price. Then, remaining suitable market orders are matched with limit orders according to price and time priority. Finally, remaining limit orders are matched with other limit orders based on price and time priority, meaning that orders placed earlier and closer to the matching price receive preference. No order submissions, modifications, or cancellations are allowed during this period.
Previously, the matching and confirmation period was from 09:08 to 09:12. Nandish Shah, Senior Analyst for Derivatives and Technical Analysis at HDFC Securities, emphasizes that the key focus of the new NSE is on changing the timing of order submission and matching based on time and price priority.
Buffer Period
The buffer period remains unchanged in the new pre-opening session—from 09:12 to 09:15 for transitioning from the pre-opening to the continuous trading session.
How the Opening Price Will Be Determined
The opening price will be set based on the principle of supply and demand, also known as the equilibrium price. The equilibrium price is the price at which the maximum volume can be executed. If multiple prices meet this criterion, the equilibrium price will be the one with the least amount of order imbalance. In cases of multiple such scenarios, the equilibrium price will be the price closest to the previous day's closing price.