Pre-opening and post-closing sessions will last 15 minutes and 10 minutes respectively
- Investors can place pre-opening trade orders from 9:45am to 10am
- Opening price will be the price at which most trades are executed
- DSE post-closing session will begin at 2:30pm for 10 minutes
- CSE has been running both sessions for the last 2 decades
Dhaka Stock Exchange (DSE), after successful user acceptance tests and awareness sessions, is introducing its pre-opening and post-closing sessions tomorrow.
The premier bourse in a statement on Tuesday said the pre-opening session would be a 15-minute show, and the post-closing session only 10 minutes. Currently, the bourse begins its trading session at 10am.
Investors can place buy and sale orders during the pre-opening session – from 9:45am to 10am. The exchange's trading system algorithm will make a match among the orders, which will be executed as soon as the opening session begins.
The price, at which the maximum number of trades from the pre-opening session will be executed, will be the opening price of the session.
DSE officials said the pre-opening session would help reduce the load on the trading system in the opening moments as the match-making engine would accomplish a lot of tasks before the execution moments.
Chittagong Stock Exchange (CSE), the second bourse of the country, has been running both the pre-opening and post-closing sessions for the last two decades.
Muhammed Mortuza Alam, head of surveillance and market operations at the CSE, recently told The Business Standard, "Pre-opening sessions give investors an updated opening price, which offers them a more dynamic reference price."
He said a large number of investors, especially those who follow technical analysis to trigger their buy-sale decisions, care a lot about the closing price. The post-closing session, which the CSE calls "Close Price Trading Session", offers investors an opportunity to follow the market and execute their trading plan.
"Some other investors often remain busy during the main session and cannot follow up whether their orders are executed or not. The short session after closing helps them get the trades executed at closing price," Mortuza added.
At the CSE, pre-opening is a 20-minute session while its Close Price Trading Session lasts five minutes.
Post-closing sessions at the DSE will begin at 2:30pm and end at 2:40pm.
Both bourses calculate the closing price based on the average price of trades executed over the last 30 minutes of the session. If there is no trade of specific scrips over half an hour, the bourses take the average price of some latest trades as closing price.
However, the circuit breaker – the allowable limit for price to move – will be based on closing price at the DSE instead of the new opening price.
Almost all the peer stock exchanges across the world have their additional sub-sessions like pre-opening and post-closing to offer convenience and uphold dynamism in the bourses. Their core trading session also lasts longer than that in Bangladesh bourses – from 10am to 2:30pm.