What is periodic call auction and why are some stocks traded in this way?

What is periodic call auction and why are some stocks traded in this way?

The Securities and Exchange Board of India (SEBI) introduced the Periodic Call Auction (PCA) concept to mitigate volatility in illiquid stocks. Typically, six call auction sessions are 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 for equity 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 extending call auction sessions to include illiquid shares in the equity market, including the pre-open session for all shares.

PCA sessions happen six times a day, each lasting for an hour starting from 9:30 AM. During this time, orders can be placed, modified, or cancelled within a 45-minute window. All orders are matched within 8 minutes, and trades are confirmed. There's also a 7-minute break before the next session starts.

If you want to buy or sell stocks traded through PCA, you need to place your order within the first 45 minutes and wait for it to be matched within the next 8 minutes.

For more details, you can check the BSE FAQ and NSE circulars BSE FAQ and NSE circular.

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