What is a Periodic Call Auction?

A Periodic Call Auction (PCA) is a stock market mechanism for illiquid stocks, used in India by SEBI, that batches buy/sell orders into scheduled sessions instead of continuous trading to reduce volatility and improve price discovery. During each session (e.g., 60 mins), orders are collected (45 mins), then matched at a single clearing price (8 mins), followed by a buffer (7 mins). This batch process prevents price manipulation and ensures stable price discovery for less frequently traded shares.