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, orders are collected, then matched at a single clearing price, followed by a buffer. This batch process prevents price manipulation and ensures stable price discovery for less frequently traded shares.