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NISM Certifications · NISM-Series-XV: Research Analyst · Terminology in Equity and Debt Markets

In equity market terminology, a stock that is trading at a price above its previous day's closing price and has hit the maximum permitted daily rise for that stock is said to be in:

The stock is in upper circuit. Exchanges set daily price bands, and when a stock rises to the maximum permitted percentage above the previous close it hits the upper circuit and cannot trade higher that day. Lower circuit is the downward limit.

  1. ALower circuit
  2. BUpper circuitCorrect
  3. CCall auction
  4. DSquare-off

Explanation

Price bands limit the maximum daily movement. When a stock reaches the upper limit of its band it is in upper circuit; the lower limit is lower circuit. A call auction is a trading session type and square-off means closing a position.

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