What if the price you see at the end of the trading day reflected where the market truly settled, rather than an average of trades over the last 30 minutes? That’s exactly what SEBI’s new Closing Auction Session (CAS) aims to achieve.
- What Is CAS, and Why Did SEBI Introduce It?
- How Does CAS Work? A Simple Timeline
- PCAS: The Pre-Open Session Gets the Same Treatment
- Example: What Your Screen Shows at 3:15 PM – A CAS Stock vs a Non-CAS Stock
- What Does This Change for You, Specifically?
- If You Use Stop Losses on Your Equity Positions
- If You Hold Stocks in Your Portfolio
- If You Invest In Mutual Funds Or ETFs
- What You Do Not Need To Do
- India’s Markets, Evolving For The Better
- FAQs
From August 3, 2026, the way closing prices are determined for F&O-eligible stocks in India is changing for the better.
SEBI’s Closing Auction Session (CAS), introduced via Circular HO/47/11/11(3)2025-MRD-POD2/I/2765/2026 dated January 16, 2026, replaces the existing VWAP-based closing price calculation with a transparent, auction-based mechanism. This brings India in line with some of the world’s most respected exchanges – the London Stock Exchange, Euronext, SGX, and Nasdaq all use closing auctions to set end-of-day prices.
At Paytm Money, we have built everything you need to navigate this change seamlessly. This article walks you through what CAS means for you, what happens to your orders, and why this is a genuinely good development for Indian investors.
What Is CAS, and Why Did SEBI Introduce It?
Every day, the closing price of a stock determines your portfolio valuation, the settlement price of derivatives contracts, and the NAV of your mutual funds. Getting this number right matters.
Until now, India’s closing price for equity stocks was derived using VWAP – the Volume Weighted Average Price of all trades in the last 30 minutes of the trading day (3:00 PM to 3:30 PM). While widely used, VWAP-based closing prices have a known limitation: they can be influenced by concentrated trading activity in that final window.
SEBI, in its January 16, 2026 circular, described the objective of CAS as ensuring “a more robust and manipulation-resistant closing price discovery mechanism” that reflects true market demand and supply.
Here is the simplest way to think about it. Under the old system, your closing price was an average of many transactions spread across 30 minutes. Under CAS, it is an equilibrium price – the single price point at which the highest number of buy and sell orders match each other. It is the price where the market genuinely clears.
Reference Price: The reference price that anchors the Closing Auction Session (CAS) auction is calculated using the VWAP (Volume Weighted Average Price) of trades from 3:00 PM to 3:15 PM, which is the last 15 minutes of the regular trading session. Orders in the auction window are accepted only within a defined range around this reference price, helping keep the session fair, orderly, and resistant to price manipulation.
Source: SEBI Circular HO/47/11/11(3)2025-MRD-POD2/I/2765/2026, dated January 16, 2026.
How Does CAS Work? A Simple Timeline
CAS applies to F&O-eligible stocks – stocks that have futures and options contracts available on them. For most actively traded large and mid-cap stocks, this includes names like Reliance Industries, HDFC Bank, Infosys, TCS, ICICI Bank, and hundreds more.
Here is how a trading day looks from August 3, 2026 onwards:
| Time | What Happens | Your Experience |
|---|---|---|
| Up to 3:15 PM | Regular continuous trading session | Trade as you normally would. Place, modify, and cancel orders freely. |
| 3:15 PM – 3:30 PM | Closing Auction window – orders collected | Limit and market orders accepted. No trades execute yet – your order joins the queue. F&O trading continues normally. |
| 3:30 PM – ~3:40 PM | Matching and close derivation | Orders are matched at the equilibrium price. Official closing price confirmed at approximately 3:40 PM. |
| 3:50 PM – 4:00 PM | Post-close session | Trades execute at the confirmed closing price for anyone who wishes to trade. |
F&O Traders: Your futures and options segment continues trading normally until approximately 3:40 PM, even after the Closing Auction Session (CAS) begins. CAS applies only to the equity cash segment only.
Key Takeaway: Your derivatives positions remain completely unaffected by the Closing Auction Session.
PCAS: The Pre-Open Session Gets the Same Treatment
The pre-open call auction isn’t new – it has run every trading day for years, from 9:00 AM to 9:15 AM, helping determine each stock’s opening price. What changes from September 7, 2026 is its internal timing structure and order-type rules, aligned with the same philosophy behind CAS.
Most Important: Unlike CAS, PCAS applies to all equity stocks, not just F&O-eligible stocks.
Key Takeaway: If you hold any listed equity stock, PCAS can affect your morning order placement, regardless of whether the stock has futures and options contracts.
Here is how the pre-open window looks from September 7, 2026 onwards:
| Time | What Happens | Your Experience |
|---|---|---|
| 9:00 – 9:05 AM | Order entry open | Limit and market orders accepted, modified, or cancelled freely. |
| 9:05 – 9:10 AM | Limit orders only | Market orders can no longer be placed, modified, or cancelled. A system-driven random stoppage may end entry at any point in this window. |
| 9:10 – 9:12 AM | Matching in progress | The exchange matches buy and sell orders to derive the opening price. No new orders can be placed. |
| 9:12 – 9:15 AM | Opening price finalised | The official opening price is confirmed. Regular continuous trading begins at 9:15 AM. |
Note: Stop loss (SL, SLM) and disclosed-quantity (iceberg) orders are not accepted at any point during the 9:00-9:15 AM window – the same restriction CAS applies at market close, now mirrored at market open.
One difference worth knowing: unlike CAS, PCAS does not disseminate a reference price or price band to investors. The pre-open session instead operates within the stock’s existing daily circuit limit, the same one that applies throughout the trading day. You will see an Indicative Equilibrium Price (IEP) during the window, but no separate band figure.
Separately, stocks with active futures contracts (stock and index futures) have their own pre-open mechanism, live since December 2025, which is also being re-timed on the same date. This is a distinct, F&O-specific track from the equity cash PCAS described above.
Example: What Your Screen Shows at 3:15 PM – A CAS Stock vs a Non-CAS Stock
Prices, quantities, and scenarios in the examples below are illustrative only and do not represent actual market values or any investment recommendation.
| At this time | Reliance Industries (CAS-eligible, F&O stock) | IRFC (not CAS-eligible) |
|---|---|---|
| 3:10 PM | Trading normally. LTP: ₹2,945. Stop loss active at ₹2,900. | Trading normally. LTP: ₹198.50. No changes ahead. |
| 3:15 PM | Auction begins. Stop loss order cancelled. Order entry pauses until 3:20 PM. Your order book shows the stop loss as CANCELLED. The in-app auction indicator appears. | Continuous trading continues. Nothing changes. Price moves freely. |
| 3:20 PM – 3:30 PM | Auction entry open. Limit and market orders accepted. IEP showing ~₹2,940 as indicative price. | Normal trading continues until 3:30 PM as before. |
| ~3:40 PM | Official closing price confirmed: ₹2,950 (equilibrium price). Portfolio updates. Order results available. | Closing price: ₹198.70 (standard VWAP as before). Portfolio updates at 3:30 PM as usual. |
Note: IRFC is unaffected by CAS at market close, but like every equity stock, it is affected by PCAS at market open (9:00-9:15 AM), since PCAS applies universally rather than being restricted to F&O-eligible stocks. See the PCAS section above.
The key CAS takeaway: at market close, changes only affect the stocks for which derivatives are available. At market open, PCAS’s changes apply to your entire equity portfolio.
What Does This Change for You, Specifically?
The answer depends on how you invest.
If You Use Stop Losses on Your Equity Positions
Stop loss orders on CAS-eligible stocks will not carry forward into the auction window when it opens at 3:15 PM. This is by design – the auction mechanism works on the premise of pure limit and market orders, and conditional orders like stop losses would distort the price discovery process.
Separately, if you place stop loss orders in the morning before market open, note that PCAS does not accept stop loss or iceberg orders at any point during the 9:00-9:15 AM pre-open window, for any equity stock. You can place these orders as soon as regular trading begins at 9:15 AM.
Here is the important context: if you are an intraday (MIS) trader, your positions are already squared off before the CAS auction window begins. For delivery (CNC) positions where you have a standing stop loss, Paytm Money will show you the CAS auction indicator and guide you through the window.
If You Hold Stocks in Your Portfolio
Nothing changes for your delivery holdings at either end of the day. Your stock positions remain unaffected throughout the CAS and PCAS windows. The closing price you see may differ slightly from what it would have been under the old VWAP method – but it will be more accurate, reflecting where the market actually settled.
If any of your holdings are CAS-eligible stocks, you will see an auction indicator on your holdings screen between 3:15 PM and 3:40 PM. All equity holdings will also show a pre-open indicator between 9:00 AM and 9:15 AM. Both are purely informational – your holdings are safe throughout.
If You Invest In Mutual Funds Or ETFs
Your SIPs, mutual fund investments, and ETFs continue completely as normal, unaffected by either CAS or PCAS. The only change is that NAVs for equity mutual funds and ETFs will be computed using the more accurate CAS-derived closing price from August 3, 2026 onwards. This is a positive development – more accurate NAV computation benefits every investor in those funds.
What You Do Not Need To Do
Nothing. Paytm Money handles all the changes behind the scenes for both CAS and PCAS. You do not need to update any settings, change any preferences, or take any action for your delivery holdings, mutual funds, or SIPs.
If you are an active intraday trader, the one practical thing to be aware of is that the usable trading window for MIS orders on CAS-eligible stocks ends at 3:15 PM. If you place stop loss orders first thing in the morning, note they will not be accepted until 9:15 AM.
India’s Markets, Evolving For The Better
Closing auctions are already the standard at many of the world’s leading exchanges – the London Stock Exchange, the New York Stock Exchange, Euronext, and the Singapore Exchange all rely on them to set their end-of-day prices. India’s equity markets are joining them, and this is a meaningful step forward – at both ends of the trading day.
A closing price that reflects genuine market consensus – rather than the average of a 30-minute window – is better for every participant: investors holding stocks, traders hedging positions, fund managers computing NAVs, and the broader market ecosystem. The same principle now extends to how each trading day begins.
At Paytm Money, we have worked to ensure that when these changes arrive, everything feels seamless for you. The prices you see on your screen, morning and evening, will reflect a market-driven mechanism at both ends of the day.
As always, if you have questions, reach out to us at support.paytmmoney.com. Happy investing.
Disclaimer: Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. This content is purely for informational purposes only and should not be considered as investment advice or a recommendation. Securities quoted are for illustration purposes only and not recommendatory. Investors are requested to do their own due diligence before investing.
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FAQs
1. Which stocks are affected by CAS?
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2. What happens to my stop loss order at 3:15 PM?
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3. Can I still place orders after 3:15 PM?
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4. Does CAS affect my F&O trades?
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5. Will my portfolio value change suddenly at 3:40 PM?
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6. Does this affect my SIPs or mutual fund investments?
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7. What is an equilibrium price, and how is it calculated?
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The equilibrium price is the single price at which the maximum number of buy and sell orders in the auction window can be matched. Here is a simplified example using Reliance Industries:
| Auction price | Buyers at this price or higher | Sellers at this price or lower | Shares that can match |
| ₹2,960 | 3,000 shares | 12,000 shares | 3,000 |
| ₹2,950 – Equilibrium | 8,500 shares | 8,000 shares | 8,000 – HIGHEST |
| ₹2,940 | 12,000 shares | 3,500 shares | 3,500 |
At ₹2,950, the most shares can be matched (8,000) – so ₹2,950 becomes the official closing price. Everyone whose order participates in the auction executes at this single price, regardless of whether they placed their order at ₹2,940 or ₹2,960.
