Sensex put options spiked sharply on expiry day after the index fell over 2,000 points in three minutes during the closing auction session (CAS) on Thursday, reviving worries about low liquidity in auction.
The Sensex eventually ended the day 417.49 points, or 0.55 per cent, lower at 76,152.86. The Nifty closed 41 points, or 0.17 per cent, lower at 23,873.45.
The swing pushed out-of-the-money put options up multi-fold during the auction as the 30-stock benchmark index dropped close to 74,370 points from around 76,510 before settling 400 points lower.
Since its introduction on August 3, CAS has seen sharp price swings and divergence due to a lack of participation.
Last week, former Member of Parliament and BJP leader Kirit Somaiya urged the SEBI to temporarily suspend and redesign the stock market’s new CAS mechanism following a dramatic 2,200-point Sensex swing on August 27, 2026 (BSE monthly F&O contract settlement day).
After today’s similar swings, several traders have taken to social media to vent their ire at CAS.
The CAS is a brief end-of-day auction in which buy and sell orders are matched to set the official closing price, similar to systems used in China, Taiwan, Hong Kong and South Korea. It replaced the earlier method of averaging prices from the last 30 minutes of trading.