u/Ghost-96x

In order to understand the new, lets first understand the old method.

Imagine Share sale during its final 30 minutes (3:00 PM to 3:30 PM).

At 3:05 PM, someone buys a share for ₹100.

At 3:15 PM, someone buys 10 shares for ₹110 each.

At 3:28 PM, a big bully runs in, quickly buys 50 shares at ₹150 each right before the bell rings to artificially push up the "final price".

Under the old system, the stock exchange added up all the sales during those final 30 minutes and calculated a weighted average price. Because the bully bought a massive batch at ₹150 right at the end, the average price shot way up, even if ₹150 wasn't what most buyers and sellers actually agreed on.

Starting August 3, 2026, SEBI replaced that continuous average calculation with a Closing Auction Session for derivative-eligible (F&O) stocks.

Here is how the bake sale works now:

1. Regular Trading Stops Early (3:15 PM): Normal continuous trading pauses at 3:15 PM.

2. The Order Box (3:15 PM – 3:35 PM): Everyone submits their secret slip of paper saying, *"I want to buy X shares at maximum ₹Y"* or *"I want to sell X shares at minimum ₹Z"*. No trades actually happen yet.

3. Finding the "Equilibrium" Price: A computer looks at all the secret slips together and asks: "At what single price can the MAXIMUM number of Shares be sold?" If ₹120 allows 500 shares to change hands, but ₹150 allows only 50 shares to match, the official closing price becomes ₹120.

4. All Matches Execute at That Single Price: Everyone whose buy/sell orders match at ₹120 gets their trade completed at ₹120.

So our Timeline now is

3:00 PM – 3:15 PM Regular continuous trading finishes; the average price here sets the *reference price* baseline.

3:15 PM – 3:35 PM Closing Auction Session (CAS) order accumulation and price discovery.

3:35 PM / 3:40 PM Final equilibrium closing price is officially published.