Now Reading: Closing auction shock fades as traders adapt to new system
-
01
Closing auction shock fades as traders adapt to new system
Initial volatility from India's new Closing Auction Session (CAS) is easing as traders adapt to the mechanism, market expert Sudip Bandyopadhyay told Business Today. The price gap between the 3:15 PM close…
The Story in Brief
Initial volatility from India's new Closing Auction Session (CAS) is easing as traders adapt to the mechanism, market expert Sudip Bandyopadhyay told Business Today. The price gap between the 3:15 PM close and the final 3:30 PM discovered price has become very small, he said. Bandyopadhyay noted that closing auction systems are widely used globally to determine market closing valuations.
With uncertainty fading, Bandyopadhyay expects traders to stop focusing on CAS-related volatility. The new mechanism, introduced by the stock exchanges, had initially caused sharper price swings and wider spreads. However, as the market adjusts, the process is settling down, he added.
The Indian Opinion
Headlines called the closing auction a disaster when it launched, but the panic was always overdone. Markets adapt. The real test is whether the mechanism produces fairer closing prices over a full quarter, not a few sessions. Traders who blamed the system for losses should check their own risk models first. Watch the bid-ask spread in the next two weeks. If it stays narrow, the story is over. If it widens again in a crash, we will see if the auction holds up under stress, not just in calm trading.
Source: businesstoday.in
This story was synthesised by AI from the source linked above.
