Day trading will resume Tuesday after Tehran Stock Exchange authorities earlier banned the practice to entice investors to adopt ‘a buy and hold’ approach.
In a notice published on its website, the TSE's market operation department said the transaction date will be changed from T+1 to T+0 which meanis investors can sell shares bought on the same day.
Day trading is the buying and selling of securities on the same day or multiple times over the course of a single session. It is, by nature, speculation in securities, which involves trade that lasts for seconds or minutes, taking advantage of short-term fluctuations in the price of an asset.
The TSE along with the junior equity market Iran Fara Bourse banned day trading on Sept. 26 as part of measures to curb speculative activity in the collapsing stock market.
The reversal came after market experts said day trading helps in improving liquidity of shares in a bourse starved of fresh money.
Shorter Pre-Market Period
Mahmoud Goudarzi, the TSE deputy for market affairs, said Monday that the exchange also wants to reduce the pre-market period from half an hour to 10 minutes.
Pre-market is the period of trading activity that occurs before the regular market session. Pre-market trading session typically occurs between 8:30 a.m. and 9:30 a.m. in Iran's equity market.
Investors usually see trade in this market to judge the potential strength and direction of the regular trading session.
The decision is aimed to discourage traders to place "false" or "misleading" orders for selling shares in large volumes during the pre-market period in a bid to distress investors and push them to sell.
Goudarzi said the pre-market period will now start from 8:45 a.m. to 8:55 a.m. and after placing orders investors will not be allowed to ignore them until the regular trading starts at 9:00 a.m.
With such and other similar measures, stock market officials have been struggling to prop up the bourse sagging since early August.
Following historic gains since the beginning of the current fiscal year in March, the benchmark of Tehran Stock Exchange, TEDPIX, grew 290% before diving deep into the red and paring most of the gains.
