Suppose the closing share price of a company for a particular day is Rs.1000. Now after the closing hours a very bad news comes out for the company. Next day when the markets open, people are queuing in large numbers to sell the stock at its lower circuit value(say Rs.900), but not a single buyer is there throughout the day. So consequently no trade occurs for the day and the price remains unchanged. Same continues to happen later on as well. Is this a possible situation? Has this ever happened?
Always.
Search only buyers/ only sellers on moneycontrol.
But price will not remain unchanged
Yes, it is possible. Here is Gitanjali Gems today. The stock has a 10% circuit limit and hit the limit right at the open. Stocks which have F&O contracts don’t have circuit limits. However. for other stocks depending on the category they are trading in, the limits can range from 2 to 20%.
Also, in stocks that are operated and manipulated can hit lower circuit for weeks together. You can check this post for more where we analysed a few such stocks.
Here are two few links which explain more about circuit limits and stock categories
Actually some volume of trade has occurred for the day in those stocks that’s why price has changed. Even if a single share trade happens then only price will change. I am asking if not a single trade happens then what?
Look at the Gitanjali Gems trade volume & delivery data. You will see atleast some shares getting traded that means some shares are getting purchased and that’s why price is changing. I am asking if not a single buyer is there from the beginning of the day till the end that is no share buyer at all. Then what?
No trade needs to happen. Price will drift until there is a buyer, and keep hitting circuits. Yes trades might have happened for different reasons - mis punch (placing buying orders instead of selling), someone actually thinking it is a good time to buy etc.
Share price is the point where the buyer and seller last met, that is where the last trade actually happened. For the price to change after that, a buyer and seller will have to meet again at some other point. But if buyer and seller fail to meet again at any other point, how will price get changed? Is it something like that, that the exchange deems the price to be the lower circuit price in case of absence of buyers and ready sellers at that lower circuit price, despite there being zero volume of trade for the day?
In short, zero trade volume and yet a price change is indeed possible?
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ah that way. Yes zero trades and still price change possible. If there are no trades in the day, exchange has a methodology to determine closing price for the day based on just the bids and offers. So yes, if there are only offers and no bids, it will automatically bring down the price.
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