Trading hours

Extended trading can improve hedging opportunities

The proposal by the National Stock Exchange (NSE) to extend trading hours for index derivatives has some obvious pros and cons. On the positive side, it would enable savvy traders to act immediately upon market-sensitive news and triggers that occur outside normal trading hours. However, it would impose extra operational costs on brokerages, and those may be difficult to recoup for smaller ones unless trading volumes pick up in the extended sessions. There could also be technically complex issues involved in reconciliation if indices are open for derivatives trading but their constituent underlying stocks (and stock derivatives) are not. On