South Korea extends stock trading to 8 pm; where does India stand?

South Korea's Korea Exchange (KRX) on Monday extended real-time stock trading until 8 pm, giving investors four additional hours after the regular 9 am to 3:30 pm session and putting the spotlight on a debate India has also grappled with — whether longer trading hours can improve market access and participation.

The new KRX after-market runs from 4 pm to 8 pm and replaces the earlier system that matched orders every 10 minutes between 4 pm and 6 pm. Most KOSPI and KOSDAQ stocks are eligible, while ETFs and ETNs have been excluded initially. The move also allows investors to react to corporate disclosures and other developments released after the regular market closes.

The move also brings KRX into direct competition with South Korea's alternative trading platform, Nextrade (NXT), which already operates an evening session until 8 pm. On the first day, KRX's after-market handled about 1.82 trillion won in turnover, broadly matching NXT's 1.79 trillion won, highlighting the question of whether longer hours will create fresh liquidity or redistribute existing activity.

India has already debated longer hours

The National Stock Exchange (NSE) in 2023 had proposed an additional 6 pm to 9 pm trading session for index derivatives, allowing investors to react to global developments after the regular 9:15 am to 3:30 pm session.

However, the proposal was shelved in 2024 after SEBI returned it amid divergent views among brokers and concerns around system readiness. NSE MD & CEO Ashishkumar Chauhan had said the proposal was not moving forward at the time.

India's commodity derivatives markets already operate well beyond the equity market's close, but there is currently no comparable extended evening session for cash equities.

For Vishnu Menon, Sebi-registered research analyst and founder of Trader Prepares, however, India's trading-hours debate risks focusing on the wrong problem.

“The problem is not insufficient trading time.”

Menon said margins, taxation, transaction costs, capital efficiency, derivatives restrictions and changing expiry and margin rules are more important factors influencing participation.

“If trading and the market activity is economically unattractive at 3:30 p.m., extending the market to 8 p.m. will not automatically bring participants back,” he said.

Longer hours could raise costs for brokers

Menon said some newer and active traders who previously participated in India's F&O markets have increasingly explored offshore brokers, forex, crypto and funded-account ecosystems, attracted by leverage, product variety and longer trading hours.

He said this could create investor-protection risks while also potentially shifting tax revenue, financial activity and business away from India's regulated broking ecosystem.

The issue is particularly relevant to derivatives. Menon said higher capital requirements and tighter risk controls may improve systemic protection, but could also make sophisticated strategies less accessible to smaller retail participants.

“The objective should therefore be effective risk management without unnecessarily restricting legitimate retail participation,” he said.

At the same time, extending trading hours would increase costs for brokers through risk management, surveillance, technology, cybersecurity, customer support, compliance and clearing operations.

If additional liquidity does not follow, Menon said, the result could be “a double blow”—higher operating costs without meaningful additional business.

Sebi's current focus is closing-price discovery

Sebi's latest consultation paper, issued on September 12, is important in this context—but it does not propose extending Indian stock-market hours into the evening.

Instead, the regulator is reviewing how stocks arrive at their closing price and how that price is used to settle derivatives contracts after the introduction of the Closing Auction Session (CAS) for F&O stocks from August 3. Under CAS, buy and sell orders are collected and matched at a single price during the final part of the trading session, rather than trades continuing normally throughout the period.

Sebi is considering whether the price used for derivatives expiry should be calculated using a blended average price from the final 30 minutes of normal trading and the closing auction, or continue initially with the average price from the normal trading session. It is also considering changes to the timing of the closing auction and the derivatives trading window around the market close

The regulator found that derivatives activity remains concentrated around the close. Average premium traded per minute between 3:20 pm and 3:30 pm during CAS was ₹189.82 crore on NSE, compared with ₹126.31 crore per minute during 3 pm-3:30 pm before CAS. On BSE, the corresponding figures were ₹288.94 crore and ₹141.48 crore.

Menon said India should therefore first address CAS mechanics, derivative settlement, expiry-day concentration and closing-price discovery before considering a longer trading window.

“A longer trading window cannot compensate for weaknesses in the existing market structure,” he said.

He suggested that India could eventually pilot evening trading in highly liquid instruments and evaluate participation, liquidity, spreads, volatility and broker economics before expanding the window.