Buying/Selling A Stock That Trades in Circuit Limits

#1
How do we ensure that we are buying / selling a stock that is trading in circuit limits ?

I'm sure we'll have to get ahead in a queue, that is, we will have to submit the order after hours or something any clue?

Thanks.
 

Alchemist

Administrator
Staff member
#2
How do we ensure that we are buying / selling a stock that is trading in circuit limits ?

I'm sure we'll have to get ahead in a queue, that is, we will have to submit the order after hours or something any clue?
You can buy a stock only if there are sellers for the stock. Otherwise not.

If a stock is continuously hitting upper circuits, you have to place order at upper circuit limit and wait for someone to sell shares to you.

Placing orders before opening may not work.

The reason is that exchanges don't accept orders before the market opens.

If a place an "After Market Order", it will stay in your broker's system till the market opens.

The broker will send the order to the exchange a few minutes after the market opens and by then it may be too late.

In such cases, it is better to place the order exactly at market opening than using an "After Market Order".
 
#3
The broker will send the order to the exchange a few minutes after the market opens and by then it may be too late.
Are you sure it happens that way ? I thought that my broker would send it immediately within some milliseconds. That would not be allowed to me.

Further, even if I place an order after market opens, I'm not sure if it is feed to the system immediately?

Let us take KFA as an example, I see some volumes for today but I'm not sure if any orders are really being executed? Can you suggest?
 

Alchemist

Administrator
Staff member
#4
Are you sure it happens that way ? I thought that my broker would send it immediately within some milliseconds. That would not be allowed to me.

Further, even if I place an order after market opens, I'm not sure if it is feed to the system immediately?
Why not test it out yourself?

Place an after-market buy order for a liquid scrip 4%-5% above the previous close.

This order will be executed as soon as it reaches the exchange.

From the trade time, you will know how long it took for the order to reach the exchange.

Also place a similar buy order as soon as the market opens. That is at 9:15:01 AM.

Note the execution time of that order too.

You can compare the execution times of the two orders.

Let us take KFA as an example, I see some volumes for today but I'm not sure if any orders are really being executed? Can you suggest?
Without trades how can there be any volume?
 

Alchemist

Administrator
Staff member
#6
I can certainly see low volumes on the stock on the broker's tool. Can you confirm ?
Volume =

number of shares that have been traded.

Today KFA's volume on NSE is 11.06 lac shares (till 3:20 PM).

That means 11.06 shares have been traded.

Number of shares available for sale at lower circuit is currently 195.76 lac shares.

If someone places a sell order now, his shares won't get sold unless the earlier 195.76 shares are sold first.
 
#7
Volume =

number of shares that have been traded.

Today KFA's volume on NSE is 11.06 lac shares (till 3:20 PM).

That means 11.06 shares have been traded.
.
First, thank you, Yes, it is better to place an order after market opens. I tried that.

With respect to volume, does it refer to number of shares that have been traded "successfully". I mean exchanged by buyers & sellers ? That is were 11.06 lac shares bought by buyers from those who had placed the orders first in lower circuit?
 

Alchemist

Administrator
Staff member
#8
With respect to volume, does it refer to number of shares that have been traded "successfully". I mean exchanged by buyers & sellers ? That is were 11.06 lac shares bought by buyers from those who had placed the orders first in lower circuit?
Yes.

Volume = number of successfully traded shares.

Today, all trades in KFA took place at 14.60.

The sell orders that were placed first were traded first.

Exchanges follow have a price-time priority rule.

Orders are stored in price-time priority in various books in the following sequence:

-Best Price
-Within Price, by time priority.

Price priority means that if two orders are entered into the system, the order having the best price gets the higher priority. Time priority means if two orders having the same price are entered, the order that is entered first gets the higher priority.
http://www.nseindia.com/content/equities/eq_orderbook.htm
 
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