The Securities and Exchange Board of India (SEBI) introduced the concept of Periodic Call Auction (PCA) with the aim of mitigating volatility in illiquid stocks. As per the National Stock Exchange (NSE), trading in illiquid stocks in the equity market is limited to periodic call auction sessions.
The Secondary Market Advisory Committee (SMAC) recommended the extension of call auction sessions to include illiquid shares in the equity market, including the pre-open session for all shares.
According to SEBI, illiquid stocks are defined as follows:
- Shares with an average daily number of trades of less than 50
- Shares with a daily trading volume of less than 10,000, and similar conditions.
Typically, there are six call auction sessions conducted each day, starting from 9:30 AM and lasting for one hour each. The call auction window for trading is similar to the pre-market session conducted for equity stocks.
Furthermore, there is a 45-minute timeframe provided for order placement, modifications, and cancellations. It's important to note that all orders are accepted and matched within the next 8 minutes, and trades are confirmed. Additionally, there is a 7-minute buffer period before the subsequent call auction session begins.
If the goal is to purchase or sell stocks that are infrequently traded and are on periodic call auctions, orders need to be placed during the initial 45 minutes, and the customer can buy or sell depending if the order is matched over the following 8 minutes. To get more information, please take a look at BSE FAQ
and NSE circular
How auction rate penalty is calculated?
There are two scenarios while calculating the auction rate for the penalty. (i) Internal Auction- The logic for calculating penalty by 5paisa Capital Ltd. T+2 Closing Price + 7% or Highest Traded price between T and T+1 day whichever is higher. (ii) ...
How Auction works in case of BTST?
Clients buying shares and selling the same on the next day or day after is known as BTST trades (Buy Today Sell Tomorrow). These trades are prone to auctions. For example, if client ABC buys 100 reliance shares on Monday and sells the same on ...
How auction affects my Portfolio and Profit & Loss?
In Portfolio and Profit and loss, sell entry for the buyer, and subsequent buy entry for seller shall be created with the auction valuation price. PNL will be calculation with their original transaction. For example, 100 shares of Reliance Industries ...
Why am I charged call and trade charges when I never called 5paisa to place an order?
A charge of ₹100 + 18% GST is levied when clients call 5paisa customer care to place, modify, or cancel an order and to check order status and margin. This charge is known as call and trade charge. This time when the computer is not accessible, you ...
What is GSM?
Graded Surveillance Measure is the term used for GSM. The securities and Exchange Board of India (SEBI) and Exchanges have been introducing enhanced surveillance measures to enhance market integrity and protect investors' interests. These measures ...