From 3 August 2026, the way the closing price of a stock is determined has changed. For stocks that have futures and options contracts, continuous trading now stops at 3:15 PM, and an auction called the Closing Auction Session, or CAS, sets the official closing price. This is a SEBI framework, applied by both exchanges, and it replaces the method used until now.
Why the closing price matters more than you might think
The closing price is not the last traded price. It feeds into a long list of things:
- The calculation of benchmark indices
- The net asset value of mutual funds
- Settlement of F&O positions on expiry
- The portfolio value and profit or loss shown in your account
- The valuation of shares pledged as collateral
Because so much depends on it, a closing price that can be nudged by a small trade in the final seconds is a structural weakness. That is the problem CAS is designed to address.
What changed
Until now, the closing price was a volume weighted average price, or VWAP, of trades in the last half hour of the session. Weighting by volume meant a large trade counted for more than a small one, which limited the damage a single small trade could do.
CAS replaces the average with an auction. Instead of measuring trades that have already happened, the exchange collects buy and sell orders into a single pool at the end of the day and identifies the one price at which the largest quantity of shares can be matched. That price becomes the closing price. Most major global markets already determine closing prices this way.
Which stocks are covered
In this first phase, CAS applies only to stocks that have active F&O contracts. Every other listed stock continues exactly as before, trading until 3:30 PM with the closing price still calculated as a volume weighted average. SEBI has structured the rollout in phases and has left open the possibility of extending CAS to other stocks later.
The new market timings
| Segment | What happens |
|---|---|
| Stocks with F&O contracts | Continuous trading ends at 3:15 PM. CAS runs from 3:15 PM to 3:35 PM. |
| All other stocks | No change. Continuous trading until 3:30 PM. |
| Equity derivatives | Trading extended to 3:40 PM, giving F&O participants time to react once the new closing price is known. |
How the auction works
The CAS window runs in phases.
3:00 PM to 3:15 PM. Regular trading continues. The exchange calculates a VWAP across these fifteen minutes, and that becomes the reference price for the auction.
3:15 PM to 3:20 PM, transition. Trading in the affected stocks stops and no new orders are accepted. Unexecuted limit orders from the regular session are carried into the auction automatically, with exceptions noted below.
3:20 PM to 3:25 PM, first order entry window. You can place, modify or cancel both market and limit orders. Through this phase the exchange publishes an indicative closing price, the total buy and sell quantities, and the order imbalance, so participants can see where the price is heading.
3:25 PM to 3:30 PM, second order entry window. Limit orders only. Market orders cannot be placed, modified or cancelled. This window closes at a random moment in its final two minutes, which is a deliberate design choice to stop participants from flooding orders in at a predictable last second.
3:30 PM to 3:35 PM, matching and confirmation. Orders are matched at the equilibrium price. Market orders are matched first, then residual market orders against limit orders, then limit orders by time priority. The equilibrium price becomes the official closing price.
What happens to your pending orders
This is the part most worth knowing in advance.
Unexecuted limit orders from the regular session are carried forward into the auction automatically, and they retain time priority ahead of orders placed during the auction itself. If you modify a carried-forward order once the auction has begun, it loses that priority and is treated as a new order.
Three types do not carry forward: stop loss orders, iceberg orders, and any order priced outside the permitted band around the reference price.
All orders that execute in the auction do so at the single equilibrium price, not at the price on your individual order. Your order price determines whether you participate, not what you pay.
What to keep in mind
Your effective cutoff for these stocks is earlier than it used to be. Continuous trading ends at 3:15 PM, so intraday positions in affected stocks need managing well before then.
Broker level timings are set by each broker, not by the exchange. Intraday auto square-off times, and the cutoffs for triggered orders and price alerts, differ between brokers.
Closing prices in affected stocks may behave differently from what you are used to. The mechanism has changed, not the fundamentals of any company.
More is still to come. The same SEBI circular restructures the morning pre-open auction session as well with effect from 7 September 2026.
