Circuit breakers are a familiar term in the stock market . Circuit breaker is the system of preventing the rise and fall of the share price of a company in the stock market one day. Without the circuit breaker, no one can buy shares unless they want.
Circuit breakers have the same law for shares of all categories in the market. Depending on the share price, the circuit breaker may vary.
Suppose yesterday, the closing price of a share was 5 bucks. If the circuit breaker is given in 5% shares, then the maximum price of that stock will rise to Rs. 5 and the lowest price may be Rs. Beyond this price, no one can sell.
There are 5 parts of the circuit breaker according to the share price.
- If a stock is priced at Rs.25, the circuit breaker for that stock will be 5%. That is, the value of that share can rise by up to 5% or decrease by 5%.
- If a share price is between Rs.25 and Rs.15, the circuit breaker for that stock will be 1.5%.
- If a share price is between Rs 5 and Rs 5, the circuit breaker for that share will be seven and a half percent. That is, the price of that stock could rise by seven and a half percent or decrease by seven and a half percent. Learn more – Why we can’t profit from the stock market
- In this way, the stock breaker will be 5.25% of the share price between Rs.
- Circuit breaker will be 5% of the share price between Rs.
- Circuit breaker for a share that is more than 5 rupees will be 5%
