What Is Upper Circuit And Lower Circuit? Uses of Calculator

 

Hello Friend we are talking about Circuit. What Is Upper Circuit And Lower Circuit? Uses of Calculator.

 

Upper Circuit  & Lower Circuit are part of trading.

When any Stock will be only buyers and no sellers that called Upper Circuit. When any Stock will be only sellers and no buyers that called lower Circuit.

Upper Circuit -UC

Lower Circuit – LC

Each share has a fixed limit of increase or decrease in price. Which is determined by SEBI. How much can a stock rise or fall in a single day?

Everything is in the hands of SEBI. If the Circuit limit is not set for the shares, there is a possibility of catastrophic losses in the market. One day you can run out of money

Because suppose SBI share price is going to be 100 rupees, any news or any other reason started to increase the share price, when the price starts to increase the volume.  A lot of buyers will keep coming.

And the buyer will actually continue to raise the share price a lot. And there will be no limit to that increase, in which case the share price could go from 100 to 150-200 or more.

Or if the share price starts falling, it can go from Rs 100 to Rs 10-20.

Now you must understand how terrible it is.

Therefore, SEBI determines the maximum increase and maximum decrease of a share in a single day according to the share category. Depending on the category of shares, some shares are priced up to a maximum of 10% or 5%, or 20% per day.

According to 10%, a share can increase by a maximum of 10% in one day, or if the price decreases then the price will decrease by 10%.

 

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When a stock gains 10% in the live market, it is called Upper Circuit.

Again, if the share price falls by 10%, it is called a lower circuit.

If any stock touches the UC or Lower Circuit, that stock will be closed immediately. You will see that when a stock has a circuit, the buyer & seller of that stock will show 0 or empty.

 

How do you understand the limit of the UC and the lower circuit?

When you buy a share from a broker company that has opened a Demat account, Show UC and lower circuit limit will be how on their platform

Moreover, you will get the UC and lower circuit limit of any share from the money control site.

I am giving the link below – Money Control

 

How To Use UC And Lower Circuit In The Stock Market?

 

When a stock is trading near its UC limit, there is a 90% chance that the stock will hit the UC that day.

 

Suppose the UC of a share of Rs 100 is 110 (as a Uc) The current price is 108 Since the stock is traded near the UC, there is a 90% chance that the stock will touch a UC that day.

So here you can keep (10-08) = 2% profit.

 

If you want to earn money through the circuit then you need to find the shares that are running near the UC. And can earn 2-3% from all those shares. Such shares are more common in the Nifty 500,

However, I would like to say that if you want to work on the circuit less qty. Buy shares.

 

Let Me Tell You About The Harmful Side Of The Circuit.

If stock hit a 10% upper circuit, there is a high probability that the next three days will require a 10% UC.

total 30% increase within 3 days

It has another feature; this upper circuit gets stuck as soon as the market opens.

If you bought those shares, you will not be able to sell them, or if you have a short-sell for any reason, you will not be able to buy the shares. You can’t do anything unless the stock is coming back to normal.

This is a terrible situation.

I would like to share with you a horrible incident of my life, in 2016 when I had no knowledge about Circuit, I short sell a share called Sorilinfra at a price of 312

 315 had a UC.

After a while, unfortunately, the stock reached the UC and closed like that day. Again, unfortunately, the share price started rising for three consecutive days. The share of Rs.312 reached Rs.412. As a result, I lost 100 rupees per share and I had to pay a fine.

So surely you understand. It is better not to trade in stocks that are circulating around the circuit.

 

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I hope you like my article What Is Upper Circuit And Lower Circuit? Uses of Calculator and your knowledge have increased a lot.

I have made a mistake in this article or if you have any questions, feel free to leave a comment in the comments box and I will try to answer your question as soon as possible.

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