Non F&O Stocks have a circuit limit band between 2 to 20% usually.
F&O Stocks have a circuit limit band of 10% and it expands by 5% every 15 minutes once the conditions are met.
Circuit limit is calculated on previous day’s last 30 minute average close price.
My questions is:
Example: On 15 Jan XYZ stock closed at 100 INR, it’s circuit band is 20%. On 16th Jan it gives a dividend of 1 INR. What will be the circuit limits? Will they be 80 (lower) and 120 (upper)?
And If the dividend is of like 25 INR instead of 1 INR. What will happen to the circuit limits?
Can you give the answer in both conditions, If XYZ is in F&O and not in F&O. Does that change something?
Interesting. Never really thought about it.
Let me take a guess.
If the dividend is categorised as extraordinary (2percent and above) then I guess circuit values will be calculated after adjusting for dividend.
In your example of stock of 100 rupees let’s say dividend of 10 is declared. Then price gets adjusted to 90 and then circuit limits are considered on this value. But if like you mentioned, dividend is just 1, then circuits are calculated on 100 only.
Again, I am just taking a logically guess.
Wait for somebody to post a link. (Me lazy)
IDFC - Feb 13, 2023 - 11 INR Speical Dividend (more than 10%)
Previous close was 90.80, and as far as I can check, the circuit limits were: 87.75 INR upper and 71.85 INR lower.
So it subtracted the dividend from previous close price and calculated circuit price.
VEDL - 2022-05-06 - 31.5 INR Interim dividend.
Previous close was 394.2 according to historical data, but according to that day’s kite quote data, previous close was 405.2. How did this calculation of 405.2 INR happen?
Upper circuit limit according to that day’s kite quote data were:
As @Jason_Castelino mentioned, price gets adjusted to the extent of extraordinary/special dividend (If its >2% of the market price) and circuits are updated as per previous_close which is already adjusted with dividend. There is no adjustment in price incase dividend is < 2% which is treated as Ordinary dividend. There is no specific link or circular explaining this but have cross verified with relevant sources.
394.2 was Spot settlement price (before dividend adjustment) and 405.2 was futures daily settlement price (before dividend adjustment). On the Ex- date i.e., 2022-05-06 the prices are adjusted to the extent of dividend which was >5% (in 2022, exchange criteria to treat extraordinary dividend was >5%).
Thank you. The 2% is calculated from which value? Previous day’s close price?
I mean, let’s say ex date is 31st Jan. On 30th Jan XYZ closes at 101 INR.
So the dividened % calculation will be: dividenedINR/101*100?
I mean what is the base of the percentage calculation? Asking this technical detail, because I am trying to calculate circuit prices for historical data.
And the threshold of 2% was same historically also, or it was different? Like you mentioned, was it 5% before 2022?
