Understanding the Closing Auction Session (CAS): Definition, Order Types, Calculation, and Matching Process

In modern financial markets, the closing price of a stock is one of the most critical metrics of the trading day. It determines mutual fund and Exchange-Traded Fund (ETF) Net Asset Values (NAVs), portfolio valuations, index levels, margin calls, and derivative settlement prices. To determine a fair, transparent, and manipulation-resistant closing price, major stock exchanges worldwide—such as the National Stock Exchange of India (NSE India) and the Hong Kong Exchanges and Clearing (HKEX)—utilize a dedicated trading mechanism known as the Closing Auction Session (CAS). Based on the core mechanics of exchange price discovery, this comprehensive guide breaks down the four foundational pillars of the Closing Auction Session: Definition: What is CAS and why do exchanges use it? Order Types Allowed: Which order types can be placed? How is it Calculated?: The single equilibrium price calculation explained. How Orders Get Matched During CAS: The step-by-step matching process. 1. Definition: Wh...