In the stock market, the stock trading at some particular point would not fall beyond the set limit to prevent the loss. The set limit is called the lower circuit in the stock market. In this article, we will explain how to exit from lower circuit stock.
The price of the lower circuit depends on different factors, which can affect the market to no small extent. In short, we can say that the lower circuit is the benchmark until which stocks’ prices will go downwards on a particular trading day. Also, when the stocks go down, there are only sellers and no buyers, making it difficult to exit the trade.
Moreover, if the share or the index hits the lower circuit and breaks it, the market halts for a few minutes to hours and maybe for the whole day.
What is Lower Circuit Limit?
The share market is all about the prices of stocks fluctuating, and this sudden rise and fall can create a panic for investors. During this time, the circuit works in full swing.
The inconsistent moment of the price, i.e., rising or falling in stock price, can often cause an upper or lower circuit. Moreover, this can cause a significant loss to the investor if you are involved in a falling market.
What happens when the stock hits the lower circuit?
Think of the chance that the stock hits the lower circuit and the consequences followed. Conditions where only one can sell the stocks, only sellers exist, i.e., more traders look towards exiting their position.
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