Zerodha's Nithin Kamath Explains Closing Auction Session, Flags Market Limitations

Every day, a stock market decides the final price of a company's shares.

In India, a new system called the Closing Auction Session, or CAS, was started to find this closing price.

Instead of taking the average price from the last 30 minutes, CAS gathers all final buy and sell orders together, like an auction.

The idea is to find a fair closing price and let big investors trade without shaking up prices.

But since CAS began, some stock prices have jumped around strangely at the end of the day.

A man named Nithin Kamath, who runs a big trading company called Zerodha, explained why.

He said India has over 13 crore people with investor accounts, but very few actually trade every day.

Because so few people trade, there aren't enough buyers and sellers at all times, so prices can move oddly.

He also said it's hard to borrow and sell shares short in India, which puts extra upward pressure on prices.

Kamath believes CAS is a good idea used by many world markets, but India needs to fix some market problems for it to work well.