Sir in respect of market wide circuit breakers it has been given that:in addition to the trading halt,a 15 minutes pre opening call auction session post each trading halt has been introduced by the sebi..what exactly is a pre opening call auction session and what happens in it?
Whenever market closes at day end or halts because of market wide circuit breaker, in this closed period lot of news, rumours or analysis about particular share floats in market.
no what should be the opening price when market opens after day or halt is question mark ? people are not sure about it, and many weird prices may be entered and it will take time to stabilize and initial period will be full of volatility.
So instead of taking first trade price as opening price an new system is introduced which is pre opening or pre opening call auction session of 15 minutes, people can enter limit order and market orders during first 8 minutes then system matches orders and price at which maximum order quantity is matched will be considered as equilibrium price and then it will become opening price.
so it is opening price discovering mechanism.