1197336 Lakh Returns were filed in first month of AY 2024-25

The National Stock Exchange (NSE) is finalising extended timings for trading in equity derivatives. As per media reports, the exchange is considering adding an  evening session between 6 pm and 9 pm for trading in equity derivatives. Notably, NSE, which is the largest derivatives exchange in the world in terms of contracts traded, holds a lion’s share in India’s derivative markets, with a 98.5% market share in this segment in FY23. 

Trading in futures and options (F&O) will also be allowed in this 3-hour evening session. Usually, trading in F&O happens during regular day sessions, which begins at 9:15 am and concludes at 3:30 pm. 

According to reports, the evening session will be considered a separate session, and not as an extension to the day session. All trades made between 6 pm and 9 pm will be settled along with the trades of the following day’s regular session. As part of extending trading hours on the bourse, the NSE is also mulling on extending this evening session to 11:30 pm in due course. 

Good for traders?
Not really. A study by market watchdog SEBI conducted during FY19 and FY22 noted that 9 out of every 10 traders in the equity F&O segment ran in red, with their losses averaging Rs 1.1 lakh during FY22. 90% of all active traders bore an average loss of Rs 1.25 lakh during this period. 

Only 11% individual traders in the equity F&O segment managed to rake in profits averaging Rs 1.5 lakh. In fact, the top 1% of all active profit makers accounted for 75% of the total net profit earned by all active profit makers, highlighting the disparity in those making profits and those running in losses.

More trading time would mean more retail individual traders risking their hard-earned money in the derivatives segment, which is highly volatile and risky. Most of them might also not be well-versed and aware of how the markets works and the risks involved, having been lured in by the promise of making sky-high returns in a short-term. The proposal of trading time extension has been sent to SEBI, which will decide on the final times.