What Is Upper Circuit In Stock Market?
Upper circuit implies the maximum price that a stock can trade at on a particular day. Similarly, the lowest circuit is the lowest price the stock can trade at on that day
What Does Upper Circuit Mean?
Stock X is trading at Rs 100 per share today and has a 10% circuit. This means that the share price cannot drop by more than 10% and cannot increase by more than 10% in the trading session
Example Of Upper Circuit
A stock is likely to hit an upper circuit when there is positive news or the company has reported stellar earnings
When Does A Share Hit Upper Circuit?
The Securities and Exchanges Board of India (SEBI) decides the circuit limit in India
Who Decides Circuits?
The domestic indices S&P BSE Sensex and NSE Nifty 50 index have circuit limits
Limits For Stock Indices
The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%
These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide
System In Trading
The market-wide circuit breakers are triggered by the movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier
What Triggers Market-Wide Circuit Breakers?
Exchange shall compute the Index circuit breaker limits for 10%, 15% and 20% levels on a daily basis based on the previous day's closing level of the index rounded off to the nearest tick size
Upper Circuit: Index Circuit Breaker Limits
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