What are circuit limits
Circuit limits are a mechanism used by Exchanges to control excessive volatility in market. It is set by Stock exchanges to restrict Maximum percentage movement of a stock in a single day. Circuit limit are decided on daily basis based on the volatility of the stock and news flow.
What happens when circuit limit is hit
Eg: if a stock's circuit limit is 20%, its trading will be halted if it moves 20% up or down in a single day.
Upper circuit limit and lower circuit limit ( UC / LC )
If this stock's price is Rs.100, then its upper cisuit limit is Rs.120 and lower circuit limit is Rs.80. Trading is halted when the stock hits uppoer or lower circuit limits. Stock will not move beyond upper or lower circuit on that day.
Latest video from our youtube channel share market malayalam about recent fall of Indian stock market and about circuit limits in stock market. Circuit limits and how it works.
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