How to exit from lower circuit stock

 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.  

What is a 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.

When the stock hits the lower circuit, there are no buyers; only sellers are there. In short, the lower circuit breaker is a regulatory tool that helps check that the price doesn’t go down much and loss does not increase.

Also, the stock market regulatory board has set the pre-defined circuits for every stock, which range from 10%, 15%, to 20%. For example, if a person has bought a stock of Rs. 500, then the limit set will be 20% on it. 

Read More: How to exit from lower circuit stock