CAS vs Category I vs Category II Stocks Explained
If you’ve traded Indian equities anytime after August 3, 2026, you’ve likely noticed something different about how certain stocks close for the day. That’s because SEBI introduced the Closing Auction Session (CAS) — a new mechanism for determining a stock’s official closing price.
But CAS doesn’t apply uniformly across the market. Understanding the difference between CAS, Category I stocks, and Category II stocks is essential if you want to avoid confusion around order timings, closing prices, and settlement.
What Is CAS (Closing Auction Session)?
CAS is an auction-based session that determines a stock’s official closing price by collecting buy and sell orders over a short window and matching them at a single equilibrium price — the price at which the maximum number of shares can trade. This replaces the earlier method of calculating the closing price as the volume-weighted average price (VWAP) of trades during the last 30 minutes of the session.
The idea behind CAS is straightforward: an auction-based close is harder to manipulate in the final seconds of trading, and it produces a closing price that better reflects genuine demand and supply at the end of the day. This matters more than most traders realize, because closing prices feed into index calculations, mutual fund NAVs, margin requirements, and derivatives settlement.
CAS was rolled out in phases, not applied to the entire market at once — which is exactly why the Category I and Category II distinction exists.
What Are Category I Stocks?
Category I stocks are securities that have active Futures & Options (F&O) contracts available on NSE or BSE. These were the first — and so far, the only — stocks brought under CAS, effective August 3, 2026.
For Category I stocks:
- Continuous trading stops at 3:15 PM instead of 3:30 PM.
- A structured auction window follows, including an order entry phase and a randomized cutoff time (typically between 3:28 and 3:30 PM) designed to prevent traders from timing orders to the last possible second.
- The closing price is determined through order matching during this auction, not through the old VWAP method.
- F&O contracts on these stocks continue trading slightly longer, until around 3:40 PM, since derivatives settlement depends on the newly discovered closing price.
- Intraday square-off timings (MIS/CO positions) have moved earlier for these stocks, and GTT orders or price alerts now trigger only up to the new 3:15 PM cutoff.
Because F&O stocks tend to be the most liquid, actively traded names in the market, SEBI used them as the pilot group for this new mechanism.
What Are Category II Stocks?
Category II stocks are every other listed security — essentially all stocks that do not have F&O contracts available. These stocks were left out of the initial CAS rollout and continue to operate under the pre-existing system:
- Trading continues normally until 3:30 PM.
- The closing price is still calculated as the VWAP of trades during the last 30 minutes of the session.
- Intraday square-off timings and GTT trigger cutoffs remain unchanged for these stocks.
SEBI has indicated that Category II stocks will continue with this existing methodology “until further notice,” while leaving the door open to bringing them under CAS at a later phase. No official date or stock list has been announced for this expansion yet.
Side-by-Side Comparison
| Feature | Category I (F&O Stocks) | Category II (Non-F&O Stocks) |
|---|---|---|
| Covered under CAS | Yes, since August 3, 2026 | Not yet |
| Continuous trading ends | 3:15 PM | 3:30 PM |
| Closing price method | Auction-based equilibrium price | VWAP of last 30 minutes |
| Order entry cutoff | Randomized, ~3:28–3:30 PM | Standard market close |
| Intraday square-off | Moved earlier | Unchanged |
| GTT/price alert cutoff | Until 3:15 PM | Until 3:30 PM |
Why This Distinction Matters for Traders
Mixing up Category I and Category II rules can lead to real, avoidable mistakes — placing an order outside the auction price band and having it auto-rejected, missing an earlier square-off deadline, or misjudging when a GTT order will actually trigger. Since a stock’s category depends on whether it currently has F&O contracts (which can change as contracts are added or removed), it’s worth checking your broker’s platform or the exchange’s official list rather than assuming based on past experience with a particular stock.
What to Expect Going Forward
Given SEBI’s phased approach with Phase 1, it’s reasonable to expect Category II stocks to eventually move under the same CAS framework, likely starting with the most liquid non-F&O names. Until that happens through an official SEBI or exchange circular, the two systems will continue to run side by side — and traders need to know which set of rules applies to which stock before the market closes each day.
About the Author
Suyesh Gusain holds an MA in Mass Communication and is NISM-certified in Equity Derivatives and Research Analysis, with two years of hands-on experience trading Indian equity markets. He writes about SEBI regulations and market mechanics in practical, easy-to-understand terms for retail traders and investors.
Disclaimer: This article is for informational purposes only and does not constitute investment or trading advice. Always verify current stock categorization and CAS rules through official SEBI, NSE, and BSE circulars before making trading decisions.
Frequently Asked Questions
What does CAS stand for in the stock market?
CAS stands for Closing Auction Session, a SEBI-introduced mechanism that determines a stock’s official closing price through an auction-based order matching process instead of the older volume-weighted average price (VWAP) method.
What is the main difference between Category I and Category II stocks?
Category I stocks have active F&O contracts and have been under CAS since August 3, 2026, closing through an auction-based process. Category II stocks are all other listed securities, which still use the VWAP of the last 30 minutes of trading to set their closing price.
Are all stocks under CAS right now?
No. Only Category I (F&O) stocks are currently covered under CAS. Category II stocks continue with the pre-existing VWAP-based closing method until SEBI notifies a further phase.
How do I know if a stock is Category I or Category II?
A stock is Category I if it has active F&O contracts on NSE or BSE; otherwise, it falls under Category II. Since F&O contracts can be added or removed, it’s best to check your broker’s platform or the exchange’s official list rather than assume based on past classification.
Does the market opening time change under CAS?
No. Market opening remains at 9:15 AM for all stocks. Only the closing process differs between Category I and Category II stocks.
Will Category II stocks eventually move to CAS?
SEBI has indicated that Category II stocks will continue with the current method “until further notice,” while leaving the door open for a future phase. No official date or list has been confirmed yet.
Does CAS affect intraday square-off and GTT order timings?
Yes, but only for Category I stocks so far. Intraday (MIS/CO) square-off has moved earlier, and GTT/price alerts now trigger only until the new 3:15 PM cutoff for these stocks. Category II stocks are unaffected and continue with standard timings.