Upper/Lower Circuit & Trading Bands

Upper/Lower Circuit & Trading Bands

To avoid and reduce the risk for investors and traders SEBI has come up with the concept of trading bands or upper/lower circuit . An Upper circuit is the maximum a stock can go up on a particular trading day . Similarly a stock if has moved low , lower circuit is the point where it can reach.There are primarily 3 level of limits put up exchanges , however NSE  has 5 limit 2% ,5% , 10% , 20% & no circuit filter . When a stock breached any first circuit it gets halted for some time however the trading will get continued till it reaches the last circuit ,after that that stock will get stopped to trade for that day .

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