Details about price band hitters & how to trade these stocks?

General
1

NSE has list of price band hitters .

  1. what exactly is a upper price band / lower price band ?

  2. when & how to trade these band hitting stocks , using which strategy ?

2
  1. Price band as the name suggests is a range of prices in which a stock is permitted to trade during the day by exchange. The upper price range is called as upper price band or loosely can be called as cap and lower price range is called as lower price band or floor price.

The basic idea of exchange to create price bands is to have a check on mass buying or selling of scrips and importantly to stop panic selling as history suggests people behave irrationally during certain points of time.

Go through the below link

http://www.nseindia.com/products/content/equities/equities/price_bands.htm

Exchange has its own criteria for placing a scrip in particular price band.

  1. There is no particular way or strategy to trade stocks based on particular price band.But generally stocks which are in 2% or 5% price bands are less liquid and more volatile and should be avoided for daily trading purposes and instead should be considered for investments. More than technical analysis fundamental studies should be considered for analyzing these stocks as they are mostly driven by Idiosyncratic factors than macro or general news.

Stock which are in 10% or 20% price bands are more liquid and less volatile comparatively to above stocks and stocks which don’t have price bands are generally more liquid and less volatile than any and can be approached with any analysis.

1 Like
3

Hi,
In the KITE watch-list the Upper circuit and Lower circuit which has been mentioned is not matching with the NSE site.

LC
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UC
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4

On kite bands will be updated for next trading day after 4 for eq.I mean on kite now you are seeing bands which are applicable for tomorrow.

5

If i need to see the Current Band for 28th May 2020, I need to check before 4 pm ?

6

Right, or just calculate by your self, based on stock category it will be 5%, or 10% or 20%. For fno stocks bands are revised as and when it reaches. ITC is 10%.

7

Got it.