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The Securities and Exchange Board of India (Sebi) said on Thursday that it would review the methodology used to determine settlement prices for derivative contracts on expiry, following feedback from market participants after the rollout of the new Closing Auction Session (CAS) in the equity cash market.

Following the news, BSE shares rallied 5% to hit a day’s high of Rs 3,466, with Angel One shares jumping 8% to Rs 308. Motilal Oswal shares gained over 2% to Rs 1,038, and Groww climbed more than 3% to a day’s high of Rs 196 apiece.

“Having considered the experience of the initial period of CAS implementation and the feedback received from various stakeholders, Sebi may be proposing certain changes in the methodology for determination of settlement prices of derivative contracts for which a consultation paper will be issued in about a week,” Sebi said in a statement.

Among the issues raised, Sebi said, a significant area of feedback relates to the determination of settlement prices of derivative contracts on expiry based on the closing price determined through CAS.

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CAS is a call auction mechanism used to determine the closing price of stocks in the cash segment on which derivative contracts are available.

Why this matters

The development gains significance as stock exchanges acknowledged that the newly introduced Closing Auction Session (CAS) had resulted in lower trading volumes.According to an ET report, equity derivatives turnover on the NSE and BSE fell to multi-month lows in August, with analysts attributing the decline to heightened volatility under the new CAS mechanism. The volatility prompted several market participants to scale back derivatives activity, particularly during the final half-hour of trading.

Last month, NSE’s total monthly equity derivative turnover stood at Rs 34.48 lakh crore, the lowest since November 2023. BSE’s August turnover stood at Rs 32.2 lakh crore, the lowest since June 2025.

Wall Street brokerage Jefferies, in a report earlier this week, said the key challenge with CAS has been the uncertainty on expiry day, forcing option writers to stay away from the market. This has reduced the profitability of proprietary traders. Jefferies said Sebi could address challenges with CAS through three measures: de-linking options expiry from the CAS window, improving the stock lending and borrowing mechanism, and deepening the auction pool.

Also read: Sebi to review derivatives settlement price methodology after CAS volatility

The review follows sharp expiry-day moves seen after the introduction of CAS. Traders have complained that sudden swings in the closing auction can lead to large changes in option prices in the final minutes of trade, especially when contracts are close to expiry.

The regulator did not specify what changes may be proposed. The consultation paper expected next week will be watched closely by brokers, proprietary desks, institutional investors and active derivatives traders.

Also read: Polycab, KEI Industries shares crash up to 9% after UltraTech Cement enters wires & cables business

Any change in methodology could be important for expiry-day risk management. If the settlement price is less directly linked to short-period CAS movements, it may reduce the chance of sudden option price spikes in the final minutes.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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Nvidia has agreed to buy Hugging Face, the New York-based developer platform, for $12.93bn (£9.57bn), in one of the chipmaker’s largest acquisitions to date.

The deal, announced on 3 September, gives Nvidia ownership of a widely used database of open AI models where developers collaborate, test and share tools.

Under the terms, Nvidia will pay about $11.9bn to Hugging Face’s investors and offer an equity-based retention programme of up to $1bn for employees who join Nvidia. Nvidia’s shares were slightly lower after the announcement.

Hugging Face was founded in 2016 by the French entrepreneurs Clément Delangue, Julien Chaumond and Thomas Wolf. Its backers include Intel, Advanced Micro Devices and Amazon. Beyond hosting AI models, it offers datasets, software libraries and cloud services used to build and deploy AI applications.

Jensen Huang, Nvidia’s chief executive, pledged that the platform would stay open after the purchase and that Nvidia’s chips would not be required to build on or deploy through it. “Hugging Face will remain an open platform for the entire AI ecosystem,” he said in a post on Nvidia’s blog announcing the deal.

Why Nvidia wants an open-model platform

Nvidia is already a major open AI player in the US through its widely used Nemotron model and has publicly backed the technology. Huang was a signatory of an open letter earlier in 2026 from major technology firms that argued for open models and warned against government regulation that would restrict their use.

Owning Hugging Face gives Nvidia direct access to a platform where developers collaborate, test and share tools, potentially providing insight and data that could help it narrow the technology gap with the leading American and Chinese labs.

“Nvidia gains visibility into customer’s preferences and the AI models they use,” said Naveen Chhabra, principal analyst at Forrester. “They can see which models are trending, what datasets customers are downloading, and the architectures that are gaining traction weeks before they hit mainstream tech news.”

Demand for open-weight models has grown among businesses balking at the cost of deploying generative AI. Chinese companies including DeepSeek, Moonshot and Z.ai have emerged as significant players with models that can match the best from the US in tasks such as generating computer code, at lower cost.

That has prompted concern that some US firms could become reliant on models from China as the two countries compete for leadership in AI. The Trump administration has been weighing whether to restrict the use of Chinese open models while also seeking to avoid hampering American businesses that have adopted them.

Chip demand

The purchase comes as some of Nvidia’s biggest customers, including Meta, OpenAI and Microsoft, develop their own AI chips to cut their reliance on Nvidia’s processors, which are costly and supply-constrained. Building up an open-source business may help Nvidia cushion any slowdown in demand from those customers.

Several Chinese chipmakers have also made recent advances that could disrupt the balance of power within big tech, although they face strict international export controls.

It has been a volatile year for chip stocks. A selloff in July wiped $1tn from the market capitalisations of leading firms. Nvidia’s shares recovered in August, when a strong revenue forecast produced the second-biggest one-day gain in market history, adding $442bn to the company’s market value.

Nvidia has also been investing in AI start-ups and infrastructure beyond its core chip business, including a $500m investment in the UK self-driving company Wayve and backing for Volta, a London-based data centre developer that has agreed a $10bn deal with Anthropic.

Hugging Face was also in the news recently after a hack by rogue AI agents that escaped OpenAI’s testing environment.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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