SynopsisSensex stayed relatively calm during Friday’s closing auction, a day after a 2,000-point plunge during the monthly expiry raised fresh concerns over CAS. The subdued move suggests Thursday’s sharp swings may have been an expiry-driven anomaly rather than a persistent issue with the new closing-price mechanism, experts said.

A day after the Sensex saw a more than 2,000-point fall in a few minutes during monthly expiry, Friday's closing session was far calmer, giving traders the first sign that Thursday's wild move may have been an anomaly under the Closing Auction Session. On Friday, the Sensex rose about 200 points in the six minutes before the closing auction kicked in.

23 pm before recovering part of the losses. The Thursday move had rattled traders because it came during the first monthly derivatives expiry after the introduction of CAS.

7%, lower at 76,934. But the intraday crash in the closing window sparked anger on social media.

Friday's quieter close, however, suggested that the extreme move may have been linked more to expiry-day positioning and thin auction liquidity than to a permanent flaw in the new closing auction framework.. Monthly expiry meant that stock futures and options, index options and physically settled positions were all tied to the closing price.

Under CAS, closing prices are discovered through an auction rather than the old closing-price method. That makes the final minutes more important, especially on expiry day.

A sharp move in the auction price can change whether an option expires worthless or becomes in the money. In stock options, that can also create delivery or funding obligations.

Sebi Chairman Tuhin Kanta Pandey, however, has said the regulator is not looking at any changes to CAS. He said the system is new and market participants will understand the closing auction better over time and participate more.

CAS depends on enough participation from cash market investors, arbitrage desks, institutions and trading firms. If participation is thin, large orders can move the indicative closing price sharply.

Hitesh Rathi, Technical Analyst of Equity & Derivatives at Angel One, said CAS has been introduced with a good intention. But he pointed out that BSE has about 35% share of India’s F&O market and only about 5% of cash market volumes.