BSE new price bands policy. - (FOR YOUR INFORMATION)

Many traders were unaware of this newly introduced BSE price band policy. I saw them getting confused about the price stagnation. Hence I thought to share it here---

In August 2015, BSE has introduced a new price band policy for the stocks listed EXCLUSIVELY on BSE.

Reason:- To eliminate the price manipulation, frauds and volatility.

Under the new framework, a security having daily price band of 20 per cent can move upward or downward up to 60 per in a week. Whereas in a month it can move upward or downward up to 100 per cent. It can move 200 per cent or 400 per cent on a quarterly and yearly-basis respectively.

Similarly, security with a daily price band of 10 per cent can move 30 per cent on weekly-basis, 60 per cent on monthly-basis, 100 per cent on quarterly-basis and 200 per cent in a year.

A stock assigned a daily price band of 5 per cent would be allowed a 20 per cent (weekly), 30 per cent (monthly), 60 per cent (quarterly) and 100 per cent (annually) movement.

Those with 2 per cent band will have 10 per cent band for the week, 20 per cent for the month, 30 per cent on quarterly basis and 50 per cent movement annually.

A factor of 200 per cent of BSE mid-cap index movement would be applied for taking into account the overall movement in the market to the monthly, quarterly and yearly price band limits.

This factor shall be added in the direction of the movement of the index (rounded off to the nearest number) and the threshold of the opposite direction will remain unchanged.

For example if the BSE mid-cap has moved up by 5 per cent in the month, then the upper limit of monthly price band shall be adjusted by 10 per cent that is the upper monthly price band shall be 110 per cent whereas the lower price band would remain as 100 per cent.

Thanks

 

Thanks for info I was confused about it. This applies only to stocks listed in BSE? If stock is listed also in NSE, the limits don't apply. Is it correct?

 

Yes I believe so as the word EXCLUSIVELY is used.

 

Probably it's applicable on BSE and NSE both. Check out: https://help.rksv.in/support/solutions/articles/41535-what-are-price-bands-and-circuit-breakers-

 

Only one BSE listed stocks.

 

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20160129-22

 

so we can trade on nse without circuit limits.

 

No, the nse circuits remain as before, the above applies to scrips listed only on bse.