Date: 14-03-2020
Subject: What is Circuit Breaker (Upper / Lower)
in Stock Market & What happens when it's Hit?
Hey My Brothers & Sisters,
Hope your Day spends Good, Let's come to our Today's topics as I mentioned in Subjects.
As we all know that Yesterday Morning Nifty 50 has Broken the Lower circuit and Market has closed for 1 hour almost. Then it has Re open with the 15 min Pre open and then Regular as well.
Well Most of people asked us that What is Circuit breaker? Why it's broken by Nifty? And What should happen when the Stock or Indices breaks the Circuit breaker?
In this Blog we are going to give you a answer for above question. That When the Market can Breaks the Upper or Lower circuit ! and When the circuit Hit by Indices or stocks How can Market react?
So First let me Introduce to all of you that What is Circuit Breaker?
> When the Stocks are Falling or Rising Consistently, It's a common thing to Break the Upper or Lower circuit by Stocks.
> And by this effect Investors might find themselves unable to Exit their orders, at least immediately, from a stock or Indices which is heating the Circuit Breaker.
> Once the Circuit Breaker Triggered , the Trading is Halts in the stocks for a numbers of hours in a day. The same thing we have faced yesterday.
> The Halt is allow to Let investors be cooler and More perfect view of the stock. The Circuit breaker is applied to Nifty , Sensex and other Indices as well.
> There aren't any circuits for 30 stocks of Sensex, and 50 Stocks of Nifty, It means these stocks can go for free fall anytime.
> There are the 3 Filters for Index circuits. Mentioning it below.
---------------------------------------------------------------------------------
> There are the 3 Filters for Index circuits. Mentioning it below.
---------------------------------------------------------------------------------
Filter 1.
Trigger Limit: 10%
Trigger time: Before 1 PM then Market Halt for 45 Min.
From 1 PM - 2.30 PM then Market Halt for 15 Min.
After 2.30 PM then No Market Halt.
-----------------------------------------------------------------------------
Filter 2.
Trigger Limit: 15%
Trigger time: Before 1 PM then Market halt for 1 Hr & 45 min.
From 1 PM- 2 PM then Market Halt for 45 Min.
After 2 PM then Market halt for Remainder of the Day.
-----------------------------------------------------------------------------
Filter 3.
Trigger Limit: 20%
Trigger time: Any time during Market Hours then Market Halts for Remainder of the Day
------------------------------------------------------------------------------
> When the Stock or Indices hits their Respected circuit filter, No one can trade them any more for the Day. If a stock Locks in Upper circuit it might beneficial for them Whose bought on Dips.
> If a stock locked in a Lower circuit then It's a very Horrible situation because there aren't any provision to exit that order.
> So we have to wait for one day, or of the Acquision price is higher than the Stock's LTP, perhaps days or months together before they can exit from the Stock or Index.
> In this type of situation where one is willing to lose money, Booking losses is fine idea on this type of situation. Because the stock is goes to the Lower circuit breaker it might be Consolidate there for some time.
> Definitely you can see the stock is Falling consistently for a few days and then might see relief when buying coming in the stock because of the Better valuation, You can use that Opportunity to exit your stock because the Rally comes by the New buying, It's can be Just for a While.
> The Most important thing is that if the stock Hitting the lower circuit because the Overall market is in the Red position, you can wait for the Clear image for a while, But the Negative news running the stock in Lower circuit, then the Exit from the Stock is better idea.
So That's it for the Blog guys, Hope your Doubts are bit cleared on the Circuit breaker, If any more question regarding you can Comment below or DM us on Whatsapp, Whatsapp Link provided Below.
Join us on Social Media:
1. Instagram: Instagram.com/expert.traders
2. Telegram: https://t.me/experttraderss
Comments and Feedback are Always appreciated.
Either Good or Bad, No Matter.
Hope everyone will do good, Take care of your Parents. Remember us in your Prayers.
Thank you,
Expert Traders Team,
WhatsappNo:096874 69260
No comments:
Post a Comment