What is Periodic Call Auction ?
The Securities and Exchange Board of India (SEBI) introduced the Periodic Call Auction mechanism in 2013 to address the issue of volatility and price manipulation in illiquid stocks.
Here's a brief overview of how it works and its key criteria:
- To enhance transparency, reduce volatility, and curb manipulation in stocks with low liquidity.
- To provide a fair and efficient price discovery mechanism for such securities.
A stock may be classified as illiquid if:
- Average daily number of trades is less than 50 in a rolling quarter.
- Average daily trading volume is less than ₹10 lakh (or ₹1 million).
- Not classified as “illiquid” if it is part of any index (e.g., Sensex, Nifty) or has derivatives contracts.
- These parameters are reviewed quarterly.
There are six call auction sessions run in a day that starts from 9.30 AM of 1 hour each. The window of call auction for trading is like the pre-market session conducted for equity stocks. During this session, 0 might be displayed in the bids and offers, as the market orders are initially priced at 0 in the pre-market session.
Also, there is a 45-minute window provided for order placement, specific modifications, and cancellation. Note that all the orders are accepted and matched in the next 8 minutes, and trades are confirmed. Also, there will be a 7-minute buffer period before the subsequent call auction session begins.
| Session Number | Start Time - Order Placement | Order Matching | Buffer Period |
|---|---|---|---|
| 1 | 9:30 AM - 10:15 AM | 10:15 AM - 10:23 AM | 10:24 AM - 10:30 AM |
| 2 | 10:30 AM - 11:15 AM | 11:15 AM - 11:23 AM | 11:24 AM - 11:30 AM |
| 3 | 11:30 AM - 12:15 PM | 12:15 PM - 12:23 PM | 12:24 PM - 12:30 PM |
| 4 | 12:30 PM - 1:15 PM | 1:15 PM - 1:23 PM | 1:24 PM - 1:30 PM |
| 5 | 1:30 PM - 2:15 PM | 2:15 PM - 2:23 PM | 2:24 PM - 2:30 PM |
| 6 | 2:30 PM - 3:15 PM | 3:15 PM - 3:23 PM | 3:24 PM - 3:30 PM |
If you intend to buy/sell illiquid stocks that are on periodic call auction, you would be required to place your orders in the first 45 minutes. Note that you can buy/sell on the basis of your order if it matches in the next 8 minutes.
Please Note
- If the order is placed but not executed during a session, it will be retried for execution in the following sessions throughout the day.
- IOC (Immediate or Cancel) and GTT orders will be rejected even if triggered for stocks under periodic call auction category.
- AMOs is not allowed for stocks under periodic call auction category.