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Big Relief For F&O Traders: SEBI May Suspend CAS System For A Year
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News18•05-10-2026, 22:42
Big Relief For F&O Traders: SEBI May Suspend CAS System For A Year
- •The Securities and Exchange Board of India is reportedly considering suspending the Closing Auction Session system for derivatives contracts for at least a year.
- •The move comes in response to excessive and uncontrolled volatility in derivatives prices during expiry days following the implementation of CAS.
- •Sudden sharp price fluctuations in the final moments of trading caused trades to square off at unintended levels, exposing traders to massive risks.
- •SEBI may now return to the previous formula using the volume-weighted average price of the last 30 minutes of trading for settlement.
- •Returning to the 30-minute VWAP model will align the Indian market more closely with global practices in the US and European markets.
Key Questions Answered
SEBI may suspend the CAS system for at least a year due to excessive and uncontrolled volatility in derivatives prices on expiry days, which has created huge risks for traders whose trades were squared off at unintended levels.
SEBI may return to using the volume-weighted average price (VWAP) of the last 30 minutes of trading as the basis for derivatives pricing and settlement.
SEBI implemented the Closing Auction Session mechanism in August of this year for stocks part of F&O trading.
