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24 Mar 2018

STOCK MARKET--Why do some stocks not have circuit limits (e.g. RCOM rising 32% in a day)?





Any stock which is part of the futures and options segment has no circuit limits. All others have.
It is assumed that stocks which are part of the futures and options segment are the most traded or widely researched stocks so people trading or investing in these stocks know what they are getting into.
Secondly, shorting of these stocks is possible by being in futures and options segment. So any person can create a hedge for his holding or create multiple strategies for playing on the downside right from creating naked shorts in futures or buying puts etc. So price discovery for these stocks is fair and cant be controlled by a single set of investors.
Hope I answered your query.
Thanks

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