upper circuit and lower circuit
In the world of stock trading, there are various terms and concepts that traders need to grasp in order to navigate the volatile market. One such term is the "upper circuit." The upper circuit refers to a price limit set by stock exchanges to control excessive price volatility. The upper circuit is a mechanism employed by stock exchanges to maintain stability and prevent extreme price fluctuations in specific stocks. When a stock hits its upper circuit limit, trading in that stock is temporarily halted for a specified period. This limit is usually a fixed percentage above the stock's previous closing price or a predetermined absolute price.
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