The Special Pre-Open Session is a one-hour call auction (9:00 AM–10:00 AM) that the exchange runs to discover the opening price of a stock that has no recent price to trade against—most commonly on an IPO's first day of trading. During this session the stock is not in normal continuous trading, and only limit orders are accepted. Normal trading begins at 10:00 AM at the price the auction discovers.
When does it apply?
- IPOs (including SME IPOs) — on the first day of trading.
- Re-listed securities — on the first day trading recommences.
- Stocks with derivative contracts — on the ex-date of trading after a corporate restructuring (merger, demerger, and similar).
The three phases
- 9:00–9:45 AM (Order entry) — place, modify, or cancel limit orders. The system randomly closes order entry sometime in the last 10 minutes (between 9:35 and 9:45 AM).
- 9:45–9:55 AM (Order matching) — the opening price is determined and trades are confirmed; orders can't be placed, modified, or cancelled.
- 9:55–10:00 AM (Buffer) — the system transitions to the normal market.
How is the opening price decided?
Only limit orders take part, and they are matched at a single equilibrium price—the price at which the maximum quantity can be executed. That equilibrium price becomes the stock's opening price for the day, which is why an IPO can open well above or below its issue price.
Are there price bands in this session?
There are no regular price bands during the Special Pre-Open Session. Instead, to stop orders at non-genuine prices, the exchange sets an operating range (a "dummy circuit filter") around the base price (for an IPO, the base price is the issue price):
- Mainboard IPOs — an operating range of -50% to +100% of the base price, which the exchange can flex in steps of 10% if demand or supply builds against it.
- SME IPOs — a fixed range of -90% to +90%, which does not flex.
- Re-listed securities — an operating range of -85% to +50% of the base price.
An order priced outside the operating range is not accepted (it results in a price freeze).
What if no opening price is found?
- For an IPO, if no equilibrium price is discovered, the stock simply opens in the normal market at its issue price.
- For a re-listed security, if no price is discovered the orders are cancelled and the Special Pre-Open Session is held again on the next trading day.
This is different from the Closing Auction Session (CAS), which sets a stock's closing price. For what this means specifically on an IPO's first day, see What happens on an IPO's listing day?.