Jefferies says closing auction hurts India's proprietary options trading; prefers Groww, MCX

Billionbrains Garage Ventures

12/08/2026 03:17

** India's closing auction system, effective August 3, has adversely affected proprietary-trading profitability this month, Jefferies says 
** Following a discussion with futures-and-options trader Keshav Guptaa, Kyoto Capital's founder, Jefferies says option premiums do not decay smoothly on expiry days 
** This uncertainty forces option writers to stay away from markets and reduces proprietary-trader profitability, Jefferies says, citing Guptaa     
** Options ADTO (average daily turnover) at NSE and BSE in August first week fall 6% and 8%, respectively, versus July 2026 
** Jefferies says de-linking options from CAS by ending option trading at 3:15 p.m., aligning with U.S. exchange practices, could alleviate the disruption 
** Adds that the regulator's steps such as advising exchanges to disclose indicative prices during the auction, probing potential manipulation, and seeking broker feedback are positive 
** CAS does not discourage retail investors as much as proprietary traders, Jefferies adds, because retail investors largely speculate and do not use bank guarantees 
** Prefers Groww BILO.NS and MCX MCEI.NS, both "Buy"-rated, over BSE BSEL.NS, rated "Hold"

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))