Opening & closing auctions
Twice a day, NSE stops the usual buy-sell rush and runs a short auction: in the morning to find the opening price, and since 3 August 2026 in the afternoon to find the closing price of stocks that have F&O contracts. The closing price matters a lot to option traders, because expiring contracts settle on it.
Why have an auction at all?
Picture a busy vegetable market just before closing time. A few loud shouts in the last minute could decide "today's price" for everyone. That is unfair. A better idea: for a few minutes, everyone writes down what they want to buy or sell and at what price. Then the organiser finds the one price where the most vegetables can change hands, and everybody trades at that price together.
That is exactly what an exchange auction does. Nobody can push the price with a few last-second trades, and the price reflects all the orders that came in, not just the last one.
How the one price is found, in 4 steps
- Collect orders. Buyers and sellers place orders. Nothing trades yet.
- Test every price. For each possible price, count how many shares buyers would take (everyone willing to pay that price or more) and how many sellers would give (everyone happy to sell at that price or less).
- Pick the busiest price. The trades that can happen at a price = the smaller of those two counts. The price where this number is biggest wins. It is called the equilibrium price.
- Break ties fairly. If two prices are equally busy, pick the one with the smallest leftover (imbalance). Still tied? Pick the one closest to the reference price.
Market orders ("buy or sell at any price") count at every price. Everyone who gets matched trades at the same single price, even if they offered a better one.
Worked example
A stock's reference price is ₹1,000. In the auction window these orders arrive:
| Buy orders | Qty | Limit | Sell orders | Qty | Limit |
|---|---|---|---|---|---|
| Asha | 300 | ₹1,006 | Esha | 250 | ₹998 |
| Bala | 200 | ₹1,004 | Farhan | 350 | ₹1,001 |
| Chetan | 400 | ₹1,002 | Gita | 300 | ₹1,003 |
| Dev | 100 | Market | Hari | 200 | ₹1,005 |
Now test each price (buyers count if their limit is at or above the price; sellers if at or below):
| Price | Buyers would take | Sellers would give | Can trade | Leftover |
|---|---|---|---|---|
| ₹998 | 1,000 | 250 | 250 | 750 |
| ₹1,001 | 1,000 | 600 | 600 | 400 |
| ₹1,002 | 1,000 | 600 | 600 | 400 |
| ₹1,003 | 600 | 900 | 600 | 300 |
| ₹1,004 | 600 | 900 | 600 | 300 |
| ₹1,005 | 400 | 1,100 | 400 | 700 |
| ₹1,006 | 400 | 1,100 | 400 | 700 |
Four prices tie at 600 shares. ₹1,003 and ₹1,004 also tie on leftover (300), so the last tie-breaker decides: ₹1,003 is closer to the ₹1,000 reference price. Result: 600 shares trade at ₹1,003. Asha, Bala and Dev buy (600 shares). The cheapest sellers fill first: Esha (250) and Farhan (350) sell. Chetan's buy at ₹1,002 and Gita's sell at ₹1,003 stay unfilled. Asha was willing to pay ₹1,006, but she pays ₹1,003 like everyone else.
The pre-open session (9:00 to 9:15 am)
| Time | What happens |
|---|---|
| 9:00 – 9:08 | Order entry. Place, change or cancel limit and market orders. The screen shows an indicative opening price that moves as orders arrive. Nothing trades yet. |
| 9:08 – 9:10 | Random close. Order entry stops at a random moment in these two minutes, so nobody can sneak in a last-second order. |
| 9:10 – 9:12 | Price discovery and matching. The opening price is fixed with the 4-step method above, and matched orders trade at it. |
| 9:12 – 9:15 | Buffer. A short pause before normal trading. |
| 9:15 | Normal trading begins. |
Who takes part: stocks, and current-month futures on stocks and indices (NSE added F&O futures to the pre-open from December 2025). Options do not: they start trading at 9:15. Stop-loss and immediate-or-cancel orders are not accepted in the pre-open. The 9:08–9:10 random close applies from 7 September 2026.
The Closing Auction Session (CAS)
Since 3 August 2026, stocks that have F&O contracts no longer get their closing price from the last half-hour average. Instead they run a closing auction. Other stocks still trade normally until 3:30 pm.
| Time | What happens |
|---|---|
| 3:00 – 3:15 | Normal trading. The volume-weighted average price (VWAP) of these 15 minutes becomes the reference price. |
| 3:15 – 3:20 | Continuous trading in these stocks stops. The reference price is worked out. No new orders. |
| 3:20 – 3:25 | Order entry 1: limit and market orders allowed. |
| 3:25 – 3:30 | Order entry 2: limit orders only. Entry closes at a random moment in the last 2 minutes. |
| 3:30 – 3:35 | Matching: the closing price is found and trades happen at it. |
| 3:35 – 3:50 | Transition. |
| 3:50 – 4:00 | Post-close session: you can still trade, but only at the closing price. |
Rules to remember: orders must be within ±3% of the reference price. Only limit and market orders are allowed (no stop-loss or iceberg orders). During order entry you see an indicative equilibrium price that updates as orders come in.
Example: a closing auction in action
Say a stock's VWAP from 3:00 to 3:15 is ₹2,000. That is the reference price, so the allowed band is ₹1,940 to ₹2,060. At 3:22 the indicative price shows ₹2,004. A big fund places a buy order and it moves to ₹2,011. Entry closes at a random moment around 3:29. At 3:30 the auction finds that the most shares can trade at ₹2,009, so ₹2,009 becomes the official closing price, the number used for indices, margins and expiry.
What it means for F&O traders
- F&O trades until 3:40 pm. Index and stock futures and options keep trading for 10 more minutes, while their underlying stocks are in the auction.
- Expiry settles on the auction price. Stock options and futures settle on the stock's CAS closing price. NIFTY's official close is built from its stocks' closing prices, so index options also depend on the auction.
- The last minutes can still move. Between 3:15 and 3:40 the indicative prices of big stocks change as orders arrive, and option prices react. Do not assume "it is 3:16, nothing can happen".
- Intraday cut-offs moved. Some brokers now square off intraday positions in F&O stocks before 3:15 pm. Check your own broker's timing.
- No more last-minute games. One big order at 3:29 can no longer yank the closing price on its own. Everyone's orders count together.
Run your own auction
Add buy and sell orders and watch the equilibrium price change. Start with the worked example, then try your own.
Buy orders
Sell orders
Timings and rules as published by NSE for the pre-open session (from 7 September 2026) and the Closing Auction Session (Phase 1, from 3 August 2026). Exchanges can change them; always check the latest circulars. Education only, not advice.