π’ India's new auction system causes wild option swings
India's new closing-auction system is creating extreme volatility in the options market. This was evident at BSE Ltd. on Thursday, where a 64,000-rupee put option surged nearly 4,000% in just 15 minutes. The BSE recorded about 4.46 billion rupees in closing-auction turnover on Thursday. This sharp volatility stems from a mismatch between how cash equities and options markets close. Traders face huge risks because small index moves can turn worthless contracts into big winners and back again quickly. π