Closing Auction Session Linked to Dip in Indian Derivatives Volumes
· Business · Economic Times, LiveMint
Equity derivatives turnover on the NSE and BSE dropped to multi-month lows in August, with analysts attributing the decline to the newly implemented Closing Auction Session (CAS). The 20-minute session, which runs from 3:15 pm to 3:35 pm, has introduced volatility that prompted traders to exit positions earlier in the day. NSE's monthly equity derivative turnover fell to ₹34.48 lakh crore, the lowest level since November 2023. Market participants, including arbitrageurs and algorithmic traders, are avoiding the final minutes of trading to mitigate risk. The regulator has confirmed that the CAS mechanism will remain a permanent feature of the market.
Why it matters
The change in trading behavior impacts liquidity and arbitrage strategies for institutional and retail traders in the Indian equity market.
Read the original report — Economic Times
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