From today, closing price will be discovered through auction mechanism for F&O stocks
Industry expects institutional orders to migrate to the auction window as the new closing mechanism takes effect on August 3
The closing price for F&O stocks will now be determined through an auction mechanism starting from August 3. This change aims to increase transparency and reduce the potential for price manipulation during the final minutes of trading. Under the new system, continuous trading will end at 3.15 pm, followed by a 15-minute auction where buy and sell orders are matched at a single equilibrium price, which becomes the stock's official closing price.
Non-F&O stocks will continue trading until 3.30 pm, while stock and index derivatives will trade until 3.40 pm. The transition is expected to have a modest impact on brokerage income, as brokers anticipate a 1-5% reduction in revenue due to the reduction of high-frequency and liquidity-providing trades around the close.
Brief written by urgent.news from Hindu BusinessLine's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
