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The Closing Auction Session (CAS) was introduced with a clear objective: better price discovery, a single equilibrium closing price, reduced impact of large volumes on closing prices, and improved NAV tracking for passive funds.

However, market structure matters. What may work well in low-derivative-volume markets can create unintended risks in India, where derivatives play a dominant role in price discovery.

Our key concerns:

1️⃣ Indicative price can be vulnerable to order manipulation
Since indicative prices are based on orders that can be modified/cancelled, they can potentially be influenced during the CAS window.

2️⃣ Liquidity remains a concern
Limited short selling, challenges in SLBM and higher STT have reduced participation in the cash market. A closing mechanism dependent on thin liquidity can amplify price distortions.

3️⃣ India is a derivative-driven market
With derivatives turnover vastly exceeding cash-market turnover, settling large derivative positions against a relatively small cash-market liquidity pool can create significant incentives for price manipulation.

4️⃣ Wild price movements in the final minutes
Even when the final CAS price remains close to the synthetic/reference price, the indicative price can experience sharp moves before settlement, creating unnecessary volatility.

5️⃣ Potential NAV & tracking implications
A distorted closing price can temporarily benefit some funds while disadvantaging investors entering or exiting at that day's NAV. Short-term tracking improvement should not come at the cost of long-term price distortion.

6️⃣ Cascading risk during extreme markets
In a 2008/2020-type event, a sharp fall/rise in the regular market could potentially be amplified during CAS, creating additional systemic volatility.

7️⃣ Derivative settlement risk
A wide CAS range combined with thin participation can transmit cash-market distortions directly into derivative pricing and settlement, particularly in 0DTE contracts.

8️⃣ Potential HFT vs retail asymmetry
CAS indicative-price feeds can be processed by HFT systems in microseconds. Institutions can react and rebalance positions almost instantaneously, while retail participants simply cannot compete on that latency.

Before discussing solutions, we must remember the basics.

A healthy financial market needs Hedgers, Speculators and Market Makers/Arbitrageurs.

Any market structure that unintentionally disadvantages one of these participants can impair efficient price discovery.

🇮🇳 Celebrating the Spirit of Freedom

This Independence Day, IRITA salutes the courage, unity and resilience that built our nation.

As India moves forward, let’s also strive for a stronger, more aware and responsible financial ecosystem—where every investor has access to knowledge, fair opportunities and transparent markets.

Freedom is not just the right to dream.
It is the power to make informed choices.

Wishing every Indian a very Happy Independence Day! 🇮🇳

Jai Hind! 🇮🇳

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🚨 Indian Traders, this is OUR voice!

IRITA petitions SEBI & Exchanges to delink weekly options expiry from CAS and retain 3:15 PM expiry.

We’re not against CAS — we want fair price discovery & a level playing field.

👉 Sign & support: https://c.org/Cjr4mzxC82

Sign. Share. Make your voice heard. 🇮🇳

#IRITA #IndianTraders #SEBI #CAS #OptionsTrading

@ZeeBusiness

We note that the video referring to derivative traders as “sattebaaz” has now been deleted following the response from the trading community.

However, deleting the video is not enough.

The statement was made publicly on a widely followed financial news platform and has unfairly damaged the reputation of lakhs of legitimate market participants who contribute to India’s capital markets and operate within the regulatory framework.

A deleted video cannot undo the impact of a public broadcast.

We therefore call upon Zee Business to issue a clear and unconditional apology on LIVE AIR, with the same prominence with which the original statement was made.

Financial journalism carries responsibility. Traders are not “sattebaaz” merely because they participate in derivatives.

Correction should be as public as the allegation.

— IRITA