Circuit Breakers

23 thg 12, 2016

**The purpose behind price bands and circuit breakers is to control mass buying or selling of shares and send a market spiraling into one direction, and perhaps most importantly, to curb panic selling.

** CIRCUIT LIMITS FOR INDIVIDUAL STOCKS.
Stock specific circuit filters are applied in both BSE and NSE index; the percentage for circuit filter limit is 2%, 5%, 10%, 20%.

**On the BSE, the Sensex & on the NSE, the Nifty whenever either triggers a circuit breaker, trading halt is applied to all equity and derivative markets. The system is applied at 3 stages of index movement 10%, 15% and 20%. like-
-If a 10% movement occurs on either index, a one hour market halt occurs if the movement takes place before 1:00pm.
-If the movement occurs at or after 1:00pm and before 2:30pm, trading is halted for 30 minutes.
-If the movement occurs at or after 2:30, no trading halt is imposed.
-If a 15% movement occurs on either index, a two hour market halt occurs if the movement takes place before 1:00pm.
-If the movement occurs at or after 1:00pm and before 2:00pm, trading is halted for one hour.
-If the movement occurs at or after 2:00, trading is halted for the remaining of the day.
-If a 20% movement occurs on either index, trading is halted for the remaining of the day.

**Note: All stocks which are traded in F&O section does not have circuits. It means they can go any value without trading halt. Example long back STAYAMCOMP had a huge fall almost 80% in one day, because it was trading under F&O and had no circuit limit.