Greetings to all the knowledgeable members available here…
I have some logical doubts in circuit limits /price band…
When a stock hit its upper price band… It means there are only aggressive buyers ( buy orders) and no seller ( sell orders) …
So when the stock is in its upper circuit limits we can’t buy as there is no sellers… But the buyers who buy the stock at lower prices can sell it and can easily square off the position as there ar still some buy orders ( buyers)… Right?.. Then we are talking about facing a problem in squaring off when a stock is in upper limit???
See, if you are a Long and stock hits the upper circuit, selling is not an issue as there will be buyers when you want to sell, but if you are Short intraday and stock hits the upper circuit then squaring-off will be an issue as you will have to buy the stock and there will be no sellers.
The same applies for when you are Short, if the stock hits a lower circuit squaring-off will not be a problem as there will be sellers present but if you are Long and stock hits a lower circuit then squaring-off will be an issue as there will be no buyers to sell to.
So sir if anyone is long/short and the stock price hits upper/lower circuits then there will be no problem in squaring off the position as there is enough buyers / sellers available… Right??
This squaring off problems only arise when the price hits lower circuits in long position and hits upper circuit in short position…
