Circuit limit in stock market
First of all I would like to thanks to all my blog viewers and I am glad to receive tremendous response from your sides for my previous article about What is SENSEX and Nifty 50? Hence please post your views and ask doubts if any related to topics, it would really help as a food of thought for writing more articles. As you would have observed, stock prices can move up or down due to a number of reasons. For example — earnings results, government policies, trends in the industry etc.
Such prices movements are reasonable and logical.
NSE Circuit Filters, India Stock Market
But in some cases, stock prices may move up or down drastically, accelerated mostly due to fear or greed by speculators and manipulators. Such movements are harmful for the stock markets. Circuit breakers were first introduced in the trading system of Indian stock exchanges back in at the BSE. There are separate circuit breakers for the indices and individual stocks. These control systems ensure sanity of the stock market and protects investors. These are also called circuit limits or price bands.
HOW DOES IT WORK? When the volatility of a stock breaks a certain limit as decided by the exchange, trading in that stock is stopped for some time. The rules for circuit breaking are decided by the Securities exchange Board Of India. CIRCUIT LIMITS FOR SENSEX AND NIFTY. Circuit filter is applied to Sensex or Nifty whichever is breached first. The trigger of circuit limits also depends on the time at which it occurs. If the movement is before 1 pm — 1 hour halt.
If the movement is at or after 1 but before 2: If the movement is at or after 2. After the above mentioned halts, trading starts again.
If the movement is before 1 pm — 2 hours halt. If the movement is on or after 1 pm but before 2 pm- 1 hour halt. If the movement is on or after 2 pm — trading will be halted for the day. The above percentage is calculated on the closing value of the Sensex or the Nifty on the last day of the immediate preceding quarter. So, for deciding the circuit limit for the Jan-march period, the closing value of the bellwether indices on December 31, would be used.
WHAT HAPPENS TO ORDERS DURING CIRCUIT LIMITS? If the market hits the upper or lower circuitstrading is halted and you cannot place orders until the market re-opens. If you have pending orders with the broker at the time of circuit break, such orders can be modified or cancelled only once the trading re-opens.
Upper circuit — When there are only buyers and no sellers in the market for particular index or stock. Lower circuit -When there are only Sellers and no buyers in the market for particular index or stock. This is how you can find Circuit limit for individual stock from Bse website For.
Ans circuit limit in stock market Question 1- Yes it happened on Monday 18th May The reason for such market euphoria was over the UPA election win and prospects of forex kontor stockholm pro-reform stable government.
Trading was open for barely 90 seconds, in two sessions of 30 and 60 seconds, with Sensex and NSE Nifty hitting the upper circuit limit not once but twice. Answer to Question 2- The circuit filters are decided google adsense money making program changed, based on the criteria decided by the Callmanager user options web pages Department of BSE Aand NSE.
It was indeed very helpful and informative!! Thank you soo soo much for the article!!
NSE - National Stock Exchange of India Ltd.
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What Circuit Filters in Stock Markets Mean – NDTV Profit
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Finance Circuit Limits-Indian Stock Markets By Rockstar. Circuit Limits Hello Friends, First of all I would like to thanks to all my blog viewers and I am glad to receive tremendous response from your sides for my forex hedge fund regulation uk article about What is SENSEX and Nifty 50?
If the movement is before 1 pm — 2 hours halt If the movement is on or after 1 pm but before 2 pm- 1 hour halt If the movement is circuit limit in stock market or after 2 pm — trading will be halted for the day. Did you enjoy this forex pro cloner reviews Signup today and receive free updates straight in your inbox.
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He is really passionate about investment in stock markets and have participated and won many business quiz competitions. His other interest lies in watching movies and cricket.
RELATED ARTICLES MORE FROM AUTHOR. COMPANIES ACT — Private Companies- Draft Notification. Comparative Analysis of Companies Act, and Companies Act, Answer to question 3- Yes it means that only and it is calculated on the base of previous day closing price.
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