There are various instances when we purchase a stock for short-term gains but instead, it starts hitting lower circuits. Today this post will inform you how to sell lower circuit stock.
The best way to sell a stock which is hitting continuous LC is by placing an order during the pre-open session. As soon as the pre-opening session is closed orders start executing.
First, let us understand about Upper and Lower Circuit Limits.
WHAT HAPPENS TO ORDERS DURING CIRCUIT LIMITS?
If a particular stock hits the upper or lower circuits, trading is halted and you cannot place orders until the trading re-opens.
If you have pending orders with the broker at the time of circuit breakers, such orders can be modified or cancelled only once the trading re-opens.
Upper circuit: When there are only buyers and no sellers in the market for a particular index or stock
Lower circuit: When there are only sellers and no buyers in the market for a particular index or stock
CIRCUIT LIMITS FOR INDIVIDUAL STOCKS
Stock specific circuit filters are applied on both BSE and NSE exchange. The percentage for circuit filter limit is 2%, 5%, 10%, 20%.
These circuit limits are not applicable to stocks in Futures and options segment For newly listed companies, there is a circuit limit of 20% from the issue price.
Your Order Still Pending After Trading Session
If your order still in pending state after the starting of the normal trading session, do not panic, keep your order open. When a stock hit in Upper Circuit or Lower Circuit after some time trading resumes. Then there are high chances that your order could be executed when trading resumes.
When there is a lot of panic in particular stock, and you are sure that stock will hit LC, then it is advisable to place an AMO (After Market Order). AMO will ensure that your order placed as soon as market pre-open starts.
In Zerodha, you easily place AMO under More Options. If you not sure how to place AMO on your trading platform, please contact them asap.
It is advisable that you should not buy stock on some random recommendations. There are a lot of companies which try to trick and manipulate the stock prices.