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CIRCUIT BREAKER FOR A STOCK

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A price range for a stock to move without any interference from regulatory authorities. Only when the stock prices move beyond the range, it is considered as entering into a circuit and circuit breakers are applied. Daily price bands of 2%, 5% and 10% are applicable to different equity stocks. Price bands of 20% are applicable to all remaining scrip like preference shares or debentures.

Example: For a stock with a price band of 5% that closes at Rs.100 on the previous day, the price band will be between Rs.105 and Rs.95.

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