Extended Trading Hours: Meaning and Implications

Published on December 24, 2025 | 2 min read

In 2018, the market regulator, Security Exchange Board of India (SEBI), enabled a framework under which exchanges could extend trading hours for the derivative segment. The motto of this framework is to allow the Indian derivative market to participate in the global market.

The Indian exchange NSE extended the trading hours for the interest rate derivatives segment only. As of now, the timings of the equity derivatives segment are still the same as normal trading hours. In this article, we will discuss the meaning and implications of extended trading hours.

What are Extended Trading Hours?

Extended trading hours refer to trading that happens outside the normal trading hours. It can be before or after the normal session. Usually, the trading that happens after the normal session is known as after-hours trading.

Extended trading hours and after-hours trading are not the same. The term extended hours is used in the context of both before and after normal hours, but after-hours trading is used only for session which happens after market closing.

On NSE, Interest rates derivatives timings are 9:00 am to 5:00 pm. The normal hours are 9:00 to 3:30 pm for equity. Here, NSE extended the 1.5 hours in interest rate derivatives.

Earlier, NSE was also consulting with market participants to extend the equity F&O trading hours to 11:55 pm. However, the discussion did not come up with any results, and timings remain unchanged.

After-Hours Trading

After-hours trading usually takes place between 4:00 pm and 8:55 am on both BSE and NSE. Traders use an After Market Order (AMO) to place a trade. AMO is a feature offered by brokers in mobile/web, which allows investors to place an order when the market is closed. These orders will get filled only in normal trading hours.

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Implications of Extended Trading Hours in the Market

The extended trading hours can affect the market participants positively as well as negatively. It depends on the types of traders and investors.

Higher Trading Volume

Longer trading hours could increase the trading volume. It provides more opportunities to traders and investors to participate in the market at suitable timings.

Reaction to Global Market News

Due to long trading hours, the Indian markets' timings will intersect with global markets. Investors will be able to react to global news that directly impacts the prices of assets.

Volatility

In crucial event-related days, such as Fed policies, global elections, etc. Volatility might remain high throughout the day. But usually, on normal days, the volatility is expected to remain low.

Reduce Overnight Risk

Due to timing intersection with global markets, the overnight risk of gap up or gap down reduces significantly.

Low Liquidity

Longer trading hours might impact the liquidity. Every time, buyers and sellers may not be available at the desired price. Due to which decrease in liquidity may be visible.

Higher Spreads

The price difference between the bid order and ask order is called the spread. Due to low liquidity, the spread might increase results in a rise in the overall cost of investing.

In the equity market, extended trading hours can be beneficial for certain specific days, but not every time. When traders and investors participate in the market for a shorter duration, it keeps the excitement among investors. Extended hours may dry up the liquidity, due to which the spread between buyers and sellers might increase, impacting the price discovery.

About Author

Subhasish Mandal

Sub-Editor

finance professional with strong expertise in stock market and personal finance writing, he excels at breaking down complex financial concepts into simple, actionable insights. Holding a Master’s degree in Commerce, he combines academic depth with practical knowledge of technical analysis and derivatives.

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About Upstox

Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.