A discussion by the National Stock Exchange (NSE) with stock brokers on longer trading hours has sparked off a debate on who will benefit the most if trading terminals are active till midnight.
Zerodha’s top boss Nithin Kamath has already sounded off an alarm saying that any move to extend trading hours for futures and options (F&O) will boost revenues for capital markets but retail investors may suffer due to stress and overtrading.
Nagpur-based trader Harshubh Shah went on to the extent of declaring on social media that the extension will force him to end his trading career after 14 years. “If time extends, I will stop trading and officially end my trading career after 14 years. Don’t wish to put money over health. Peace matters, family time matters,” he tweeted.
Stock exchanges have the power to extend trading in the F&O segment till 11:55 pm and in cash segment till 5 pm. Trading on both platforms ends at 3:30 pm currently.
In the meantime, the NSE has already extended trading hours for interest rate derivatives till 5 pm.
Derivatives trader views
Derivatives trader Ashish Gupta said that extended trading hours will give an opportunity to timely hedge positions in case of any shock event but will lead to increased fatigue and stress level for active traders like him.
Brokerages perspective
Brokerages believe that extending market hours in the equity F&O and currency segments is necessary for hedging overnight risk from global uncertainties.
“Resistance and negativity regarding this topic could inhibit the growth of our capital markets because financial markets are increasingly interconnected, and cutting off access to hedge will prevent India from becoming a global investment destination,” said Tejas Khoday, Co-Founder & CEO of discount broking platform FYERS.
Longer trading hours will help increase capital formation by enabling more people from India to participate and attract foreign investors to invest and hedge their portfolios with currency and equity F&O, he said.
Brokers also say that extension of trading hours may further motivate Gen Z and millennial investors, leading to a possible rise in volumes as they can now trade in stocks after addressing their professional commitments.
An extension in the F&O market timings can also help us pull back the trading volumes that go offshore post our trading hours, offering additional trading and earning opportunities to the market participants, said Anuj Shah, Chief Business Officer, Axis Securities.
