What happen when the circuit barrier of a stock is broken?

#1
What happens when the circuit barrier of a stock is broken?

I used to own Hanung Toys but sold it a few days back.

Now, it saw a 20% downside for 2 days and today it saw a 10% downside. It is not up for trade anymore, and the counter has only sellers and no buyers.

What happens to the people who are owning the stocks? It is at 37 now and at this rate it is touch 20 soon.

Somebody please answer.

P.S. The same is happening to Gitanjali Gems.
 
Last edited:

gambler

Well-Known Member
#2
Re: What happens when the circuit barrier of a stock is broken?

I used to own Hanung Toys but sold it a few days back.

Now, it saw a 20% downside for 2 days and today it saw a 10% downside. It is not up for trade anymore, and the counter has only sellers and no buyers.

What happens to the people who are owning the stocks? It is at 37 now and at this rate it is touch 20 soon.

Somebody please answer.

P.S. The same is happening to Gitanjali Gems.
If rahul knows all than why rahul asking query.. lol
 

Tlahuicole

Well-Known Member
#4
Hi Rahul,

I am not sure whether you are talking about circuit breaker getting hit. If thats the case, I can explain the situation.

Consider I buy stock X for 25RS on 13th July, after I buy the stock goes to 22RS the next day which the lower circut for that stock, If a stock hits lower circuit and stays there for a specific period of time, then lower circuit is considered to triggered. In this case, no one can sell the stock x as there are no buyers willing to buy the stock.
Now cmes the nex day 15th Juky where the stock again hits lower circuit of 19RS, again same situation no one owning the stock can sell it. This is the scenarion.

Lower circuit happen in two ways.
1)The stock's price is determined during pre market time 9:00 to 9:15 and the opening price of stock will be on lower circuit price at which no one can sell.
2)The stock's price is determined during market time 9:15 to 3:30, if this is the case you have some hope, to sell the stock as soon as possible at a decent price above lower circuit.

If case 1 seems to be happening, better put the target price which might be near to lower circuit, and place the order as limit before market opens that is be fore 9AM. This is the only way to sell stock in this conditions.

regards,
Tlauhicole.
 

bunny

Well-Known Member
#5
Re: What happens when the circuit barrier of a stock is broken?

What happens to the people who are owning the stocks? It is at 37 now and at this rate it is touch 20 soon.
People who are unable to sell their stock will have to watch their holdings valuation fall everyday.

I have 'heard' that brokers can arrange to sell such stocks in off-market transactions but don't have any first hand information.
 
#6
Thanks Tlauhicole and Bunny. :)

@ Tlauhicole - Yes, I meant the circuit getting hit only. :D

So, are you saying if Situation 1 happens, I can actually sell the stock if I put a lower target during pre-market?

@ Bunny - If the brokers can't arrange to sell, then will my valuation keep dwindling till it becomes 1 rupee/a share or lesser. Does it mean that people can lose ALL their money in a particular stock if it completely crashes and there will be no way of getting out? :O
 

Mr.G

Well-Known Member
#8
Re: What happens when the circuit barrier of a stock is broken?

People who are unable to sell their stock will have to watch their holdings valuation fall everyday.

I have 'heard' that brokers can arrange to sell such stocks in off-market transactions but don't have any first hand information.
Brokers do that but they buy at a discount from the market price. It's just like one person selling shares to another person. They won't buy this stock, they buy stocks with no liquidity.
 

Tlahuicole

Well-Known Member
#9
Thanks Tlauhicole and Bunny. :)

@ Tlauhicole - Yes, I meant the circuit getting hit only. :D

So, are you saying if Situation 1 happens, I can actually sell the stock if I put a lower target during pre-market?

@ Bunny - If the brokers can't arrange to sell, then will my valuation keep dwindling till it becomes 1 rupee/a share or lesser. Does it mean that people can lose ALL their money in a particular stock if it completely crashes and there will be no way of getting out? :O
Just faced this situation once buddy so not sure, but the only way of getting out is putting lower price than yesterday closing price so that your position gets filled as early in the opening time of the market.
 
#10
Iam also facing the same problem with India tourism corp ltd.(indtode).First its price was 850 and now it has reached 335.Everyday iam giving sell but it is getting expired .There r only sellers for this stock
 

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