Close-to-close price variation refers to the percentage change in a stock’s closing price from one trading session to the next. A significant or abrupt change in this variation could signal irregular trading patterns or potential market manipulation.

Stocks that demonstrate unusually high close-to-close price variations are often flagged under Additional Surveillance Measures (ASM) or Enhanced Surveillance Measures (ESM) by regulatory authorities like SEBI and stock exchanges. This is done to monitor and control speculative activities, ensuring fair and transparent trading practices in the market.

For example, if a stock’s closing price fluctuates sharply without any fundamental reason, it may be subjected to these surveillance measures to protect investors and maintain market stability.