Jefferies says India's closing auction disrupts options, pressures BSE, Groww

Billionbrains Garage Ventures

02/09/2026 06:34

** Jefferies says India's August 2026 introduction of the closing auction session disrupts equity-options activity, with negative implications for BSE BSEL.NS and Groww BILO.NS
** BSEL and BILO down 12.7% and 3.5% since the introduction of CAS
** CAS replaces the earlier volume-weighted average pricing with an end-of-day auction, heightening closing volatility, especially on expiry days
** Auction pools remain shallow at about 1% of cash average daily traded value, amplifying uncertainty, Jefferies says
** Adds, this deters option writers and proprietary traders, lowering participation and profitability
** Industry index-options premium average daily traded value falls 20% month-on-month to 539 billion rupees in August, the lowest since February 2025
** Option contracts decline 30%, while cash contracts fall 11%
** BSE's options average daily traded value drops 26%, and Groww's equity-derivatives premium turnover falls 24%    
** Jefferies suggests separating expiry from CAS, improving securities lending and borrowing, and deepening auction liquidity over time may help address challenges

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