Comment on Stop Loss orders - Limit/Market

Nithin Kamath commented on 14 Sep 2014, 11:05 AM

Raj, every stock has a circuit limit (stocks which don’t trade on F&O), for example Bhushan steel presently has a circuit limit of 5%. This circuit limit is put by the exchange to ensure there is no manipulation in stocks, it is usually a 20% limit, but as the volatility increases it can come down to 5%.

What this means is, if Bhushan Steel stock price is Rs 100, the price for the day can’t go either above 105 or below 95. If assuming during the day it goes to 105, it is called as hitting the upper circuit. So unless people sell shares, the price will stay constant at this price without fluctuation for the rest of the day. This is what you are seeing on these two stocks now.

View the full comment thread »