Understanding Upper/Lower Circuit in Stock Trading தமிழ்

Upper circuit and lower circuit are terms used in stock trading to refer to the maximum percentage by which a stock's price can rise or fall in a single trading session.

The upper circuit is the maximum limit to which a stock price can rise in a single trading session. Once the stock hits the upper circuit, trading in the stock is suspended for a certain period of time, usually 15 minutes, to allow market participants to adjust their trading strategies.

Similarly, the lower circuit is the maximum limit to which a stock price can fall in a single trading session. Once the stock hits the lower circuit, trading is again suspended for a certain period of time to allow market participants to adjust their trading strategies.

The upper and lower circuits are determined by the exchanges where the stock is listed and are based on various factors such as the stock's price movements, trading volume, and volatility. These circuits are usually calculated as a percentage of the stock's previous day's closing price.

Upper and lower circuits can have a significant impact on stock prices and trading volumes. For instance, when a stock hits its upper circuit, there is usually a surge in buying activity, which can lead to further price increases. On the other hand, when a stock hits its lower circuit, there is usually a surge in selling activity, which can lead to further price decreases.

Overall, understanding upper and lower circuits is essential for anyone looking to invest in the stock market. It can help investors make more informed decisions and avoid potential losses due to sudden price fluctuations.


Manappuram Stock Falls 20% | Understanding Upper Circuit & Lower Circuit in Stock Trading


Once a stock hits either circuit, trading is suspended for a certain period of time to allow market participants to adjust their trading strategies. This is where after-market orders come into play. After-market orders are orders to buy or sell a stock after the regular trading hours. By placing after-market orders, investors can navigate the circuit limit of a stock by taking advantage of the price movements that occur after the regular trading hours.

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