What is a Circuit Break ?

Circuit breaker is a provision started for the safety of investors. Every time the stock price or Nepse index makes a significant movement on either side, a halt is applied in order to stop any kind of emotional move. In Nepal, this system came into effect from 2064/6/4 (21^st September 2007).

The halt provision applies in 3 stages and ultimately ends up closing the day’s trading.

The 3 stages of circuit break in Nepse index:

In case of Individual companies listed in Nepse, circuit break applies at 10% price movement on either side (Positive or negative). The stock cannot trade at a price higher or lower than 10% of the last traded price.