Are you ready to trade in options? If yes, which market do you prefer, equity or commodity? Are you aware of the options trading time in both of these markets?
If not, then along with the concepts and strategies gaining an understanding of market timings is also important to ensure profit in trades.
In this article, get an understanding of the start time, end time, settlement, and commodity trading time in the options market in detail.
Options Trading Time in India
Looking at the stock market time, it is 9:00 AM to 3:30 PM, but can a trader place and execute the order through the trading session?
For your information, the market session is divided into 3 broader parts:
- Pre-Market Session
- Regular Session
- Post Market Session
- Pre-Market Session: The 15-minute pre-market session for equity options starts at 9:00 a.m. Investors may place orders, change existing orders, or withdraw orders for the following trading session during this period.
- Regular Session: It begins at 9:15 AM and closes at 3:30 PM. However, the square-off time is 10-15 minutes before the closing time which varies from broker to broker. This means by that time you need to close all your intraday options open position to avoid any auto-square off charges and other losses.
- Post-Market Session: From 3:40 to 4:00 p.m. after the regular trading hours, there is a post-market session. This session allows investors to place orders for the next trading day.
Here the pre and post-market session is further divided into sub-sessions, the detail of which is given in the table below:
Option Trading Expiry Time
Now, apart from the day-to-day trading session, option contracts come with an expiration. Expiry in share market is the day on which the buyer can settle the trade in case the market expires in the money. Also, options come with different expiry.
For example: stock options has monthly expiry, however, when it comes to index option there are weekly expires too.
Stock options expire on the last Thursday of every month, while index options have different days of expiration, the detail of which is given in the table below:
Along with this, if the expiry coincides with the bank holiday or any other trading holiday then the option expires one day before the expiry day.
Considering the expiry time, the contract loses its value, if not traded, after the market closes, i.e. 3:30 PM, and hence one can trade options before the closing hours.
Options Trading Best Time Frame
Now comes the time frame of the charts that helps the trader in analyzing the market and in taking the right position. In the case of options trading, the right time frame depends upon the kind of trader, the purpose of the trade, and the research.
The options trading analysis can therefore be done best in the daily chart. You can, however, change the time frame according to your trading style.
For example, to avoid the theta impact due to which option buyers lose money, the option buyers generally prefer scalping and intraday in options. If the buyer does scalping in options, then a 5-minute time frame is suitable for you. For short-term trends, you can rely on the 15-minute time frame that gives you a clear idea to plan your entry and exit strategies.
On the other hand, sellers who generally hold their position overnight to earn money from time decay in options, generally prefer analyzing hourly or daily charts to take position and 15-minute charts to monitor their positions.
The detail of the option trading time frame is given in the table below:
You can use best indicator for option trading in the above time frame for the correct analysis of the market.
Commodity Options Trading Time
Interested in commodities? Commodity options provide traders with the ability to participate in price movements of various commodities, such as gold, silver, crude oil, natural gas, and agricultural products.
Now commodity markets are traded across three different centrals:
All these sessions have their own trading time. Along with this, a few commodities like gold and crude oil have extended option trading time in India because of their high demand. Considering these parameters help a trader in determining their strategies.
Commodity trading is mainly regulated by the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX) India. Here talking about the crude oil trading time in India which is regulated by MCX, it is Monday to Friday between 9:00 AM to 11:30 PM.
The MCX market is separated into evening and morning sessions:
- Morning session: 10:00 am to 5:00 pm
- Evening session: 05:00 am to 11:30/11:55 pm
Like the equity market, there are different trading sessions in Commodity as well, and also there is a difference in the trading time for different commodities.
- Pre-Market Session: The pre-market session for commodity options starts at 9:00 a.m. and lasts for 55 minutes. During this period, traders can place orders, modify existing orders, or cancel orders for the upcoming trading session.
- Post-Market Session: After the regular trading hours, a post-market session takes place from 11:45 p.m. to 12:00 a.m. During this time, investors can place orders for the next trading day
Other than this, the options trading time of different commodities in India is given in the table below:
Currency Options Trading Time in India
The currency trading time in India is 9:00 AM to 5:00 PM thus in currency options, you get an additional trading window of 90 minutes. This implies that the currency trading time in India followed Japan and Hong Kong by 3.5 hours and 2.5 hours respectively.
Now, this overlapping of time helps in determining the liquidity and volatility of the market. When the Indian share market closes at 5:00 PM, the price overlaps with the European currency markets.
The cross-currency trading hours for trading in EUR-USD, GBP-USD, and USD-JPY are different from the INR option trading hours. This market opens at 9:00 AM and closes at 7:30 PMm Cross-Currency Trading Hours
It is important for traders to know the options trading time, sessions, and time frames. Also, it is important to know the factors that impact this time in commodities and currency. Through this, you can effectively participate in different options markets in India and execute strategies accordingly.
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