Big Change for F&O Traders

 

Big Change for F&O Traders: How Share Closing Price Will Be Decided Now

If you trade in the stock market, especially in F&O (Futures & Options), there's an important change you should know.

Until now, the closing price of F&O stocks was calculated using the average price (VWAP) of trades during the last 30 minutes of trading.

From now on, that will change.

The stock exchange is introducing a Closing Auction Session (CAS) for F&O stocks.

What is CAS?

CAS stands for Closing Auction Session. It is a special 15-minute session held before the market closes to decide the final closing price of an F&O stock.

Instead of taking an average price, the exchange will match buy and sell orders. The price at which the maximum orders match will become the official closing price.

What will happen?

• Normal trading will continue until 3:15 PM.

• After 3:15 PM, cash market trading for F&O stocks will stop.

• Traders can place orders during the auction session.

• The exchange will display an indicative closing price.

• Finally, the price where the highest number of buy and sell orders match will become the official closing price.

• Futures trading will continue until 3:40 PM, with a 3% price movement limit during the extended session.

Why is this change important?

This new system is expected to:

• Make closing prices more accurate.

• Reduce the chances of price manipulation.

• Improve fairness during market closing, especially on expiry days.

Final Thoughts

If you trade in F&O stocks, don't leave your screen at 3:15 PM anymore. The last few minutes of the trading day will now play a much bigger role in deciding the official closing price.

Disclaimer: This article is for educational purposes only and should not be considered investment advice. Always do your own research before making any investment decisions