Retail traders across India stopped trading on August 12 to protest the new Closing Auction System (CAS). They say the system increases volatility and causes large gaps between final benchmark prices.
On X, user @piyush_trades urged traders to skip the day, saying, "If you want Indian traders to prosper, do not trade today. I will not even place an order." Another user, @Mohitsharma202, added, "Stopping trading for one day won’t change anything, but standing together may prevent future restrictions."
Ashish Gupta, an independent trader, explained that CAS keeps the equilibrium price shifting during the auction, which forces options to reprice within seconds. He warned that both buyers and sellers could suffer big losses in that window.
Gupta said traders are not against CAS itself but want more transparency and stability. They want the equilibrium price to stay steady, not fluctuate by hundreds of points in seconds.
After CAS started, derivative volumes fell sharply. Options volume dropped 46% and notional turnover fell 27% over the first six trading days, compared with 23 days in July.
In the last 15 minutes of trading, volumes accounted for only 1.6% to 2.3% of daily turnover on the NSE, far below the historical 10.1%, according to a Bernstein analysis accessed by Reuters.
The Indian Retail Investors & Traders Association (IRITA) asked exchanges and SEBI to unlink weekly expiries from the closing auction. They want weekly contracts to expire at 3:15 pm to avoid uncertainty and price distortion.
CAS is a 15‑minute auction from 3:15 pm to 3:30 pm that matches buy and sell orders at an equilibrium price to maximize volume. It was introduced to improve price discovery, reduce manipulation and align India’s market with global practices.