New Closing Auction Session (CAS) Every Trader Should Know

Starting August 3, 2026, stock exchanges will introduce the Closing Auction Session (CAS) for select stocks. While regular trading hours remain unchanged in the morning, the market closing process will be different for many actively traded stocks.

For most retail investors, the change won't affect how they buy or sell shares during the day. However, if you trade F&O stocks, use intraday (MIS) products, or simply want to understand how stock closing prices are determined, this update is worth knowing.

Let's understand what the Closing Auction Session is, why SEBI is introducing it, and what changes for traders and investors.

What Is the Closing Auction Session (CAS)?

The Closing Auction Session (CAS) is a dedicated auction held after continuous trading session ends for CAS eligible stocks. Instead of calculating the closing price based on the last 30 minutes VWAP of the trading session, the exchange collects buy and sell orders during a short auction window and determines a single equilibrium price.

That equilibrium price becomes the official closing price of the stock. The objective is straightforward: make the closing price reflect overall market demand and supply more accurately.

Market Closing Timings Effective August 3, 2026

Although market opening hours remain unchanged, closing timings will differ based on the segment.

Revised MIS Auto Square-Off Timings

If you trade using the MIS (Margin Intraday Square-off) product, the auto square-off timings will also change.

If you usually hold MIS positions until the last few minutes of the Auto Square-Off Time, make sure you're aware of these revised timings.

Planning your trades? Check the latest market holidays and trading hours.

Why Does the Closing Price Matter?

At first glance, the closing price may seem like just another number on the chart. In reality, it plays an important role across the financial markets.

The closing price is used for:

• Calculating benchmark indices like Nifty and Sensex
• Determining the Net Asset Value (NAV) of mutual fund schemes
• Final settlement of stock derivative contracts on expiry
• Portfolio valuation shown by brokers
• Daily profit and loss calculations
• Valuation of pledged shares used as collateral

Because so many market activities depend on it, having an accurate closing price is essential.

How Was the Closing Price Calculated Earlier?

Until now, exchanges have determined the closing price using the Volume Weighted Average Price (VWAP) of trades executed during the last 30 minutes of trading.

The formula is:

VWAP = Sum of (Price × Volume of each trade) ÷ Total Volume

This approach gives more weight to trades with larger volumes instead of simply taking the last traded price (LTP).

Which Stocks Will Be Covered Under CAS?

The implementation will happen in phases. During Phase I, stocks are divided into two categories.

Category I

Stocks that are part of the F&O segment on either NSE or BSE.

These stocks will participate in the Closing Auction Session.

Category II

All other equity stocks.

These stocks will continue trading normally until 3:30 PM.

What Changes for Traders?

The biggest operational change is for traders dealing in F&O stocks.

Here's what happens:

• Continuous trading for CAS stocks ends at 3:15 PM
• Regular equity trading for non-CAS stocks continues until 3:30 PM
• Index and stock derivatives continue trading until 3:40 PM

So while derivatives remain open for another 25 minutes, the underlying F&O stocks will already have entered the auction process.

How Does the Closing Auction Session Work?

The Closing Auction Session is divided into four stages:

Let's look at each stage in detail:

3:00 PM – 3:15 PM: Continuous Trading Continues

Trading operates normally during this period. At the same time, the exchange calculates the VWAP for these final 15 minutes. This value becomes the Reference Price, which serves as the starting point for the Closing Auction Session.

3:15 PM – 3:20 PM: Transition to CAS

Once continuous trading ends for Category I stocks at 3:15 PM, the exchange begins the transition to the auction session.

During these five minutes:

• No fresh orders can be placed.
• The permissible auction price range is fixed at ±3% of the reference price.
• Eligible orders from the Continuous Trading Session are carried forward.

However, the following orders are cancelled:

• Stop Loss (SL) Orders
• Disclosed Qty Orders
• Orders placed outside the applicable price band for CAS

For futures contracts, orders outside the permitted price band are also cancelled. Kindly note, this rule does not apply to options contracts.

3:20 PM – 3:25 PM: Order Entry Session I

This is the first active auction window. During this stage, traders can place:

• Market Orders
• Limit Orders

The exchange also continuously publishes important auction information, including:

• Indicative equilibrium price
• Total buy quantity
• Total sell quantity
• Order imbalance
• Indicative index value

These updates help participants understand how the auction is evolving before the final price is determined.

3:25 PM – 3:30 PM: Order Entry Session II

The second auction window introduces additional restrictions. During this period:

• Only Limit Orders can be entered.
• Existing Market Orders cannot be modified or cancelled.

To discourage last-second order flooding, the exchange will close this session at a random time between 3:28 PM and 3:30 PM instead of exactly at 3:30 PM.

3:30 PM – 3:35 PM: Order Matching

Once order entry closes, the exchange stops accepting new orders. All eligible buy and sell orders are matched using the equilibrium price algorithm. The resulting equilibrium price becomes the official closing price for that stock.

This closing price is then used for all market-wide calculations, including indices, mutual fund NAVs, settlements, portfolio valuation, and other post-market processes.

How Are Orders Executed?

Once the exchange identifies the equilibrium price, it begins matching all eligible buy and sell orders in a predefined sequence. Market orders are given priority and are executed first in the order they were received. If any market orders remain unmatched, they are then paired with eligible limit orders based on the price-time priority principle. Finally, the remaining limit orders are matched with one another using the same price-time priority. This structured execution process ensures that the maximum possible quantity of shares is traded at the equilibrium price, resulting in a fair, transparent, and efficient determination of the stock's official closing price.

Disclaimer: The information provided in our blogs is for informational purposes only and should not be construed as financial, investment, or trading advice. Trading and investing in the securities market carries risk. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Copyrighted and original content for your trading and investing needs.

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