New Delhi. While the general public is waiting for the results of the Lok Sabha elections, traders are keeping an eye on the market growth. In Monday's session, Sensex and Nifty saw a great growth. In such a situation, while investors made profits, they are also afraid of losses.

It is completely clear in Monday's session that the stock market has a connection with the elections. But there is a fear that if there is a reversal in the stock market, investors will have to face losses. Although the chances of reversal in the stock market are low, still the stock exchange is ready for it.

Actually, the stock exchange applies circuit breakers to protect investors from sharp fluctuations in the market. These circuit breakers can be applied in the market even today.

what is a circuit breaker

On 2 July 2001, the stock exchange implemented index-based market-wide circuit breaker. This breaker controls the movement of the stock market. These breakers are applied in 3 stages. These breakers are applied when the stock market fluctuates by 10%, 15% and 20%.

Let us tell you that in circuit breaker all equity and equity derivative markets remain closed for a time limit. This means that investors cannot buy or sell shares for a fixed time limit.

When does the circuit breaker trip?

Circuit breaker is applied in the stock market when there is a sudden fluctuation in Sensex or Nifty and it crosses any of the fixed levels. After crossing each level, trading in the market stops for some time and the rules for starting trading are also different.

For how long will the market be closed

If the stock exchange crosses the 10 per cent limit before 1 pm, that is, if the market rises or falls by 10 per cent, then the market trading is closed for 45 minutes.

In such a situation, a pre-open call auction session is held to restart trading in the market. The pre-open call auction session is of 15 minutes.

At the same time, if there is a 15 percent fluctuation in the market before 1 pm, then the market is closed for 1 hour 45 minutes. If there is a 15 percent rise in the market after 1 pm and before 2 pm, then the stock exchange will remain closed for only 45 minutes.

At the same time, if the market gains 15% after 2 pm, then the market closes for the entire session. This means that trading starts only in the next trading session.

If the market fluctuates by 20 per cent the next day too, then the stock exchange is closed for that entire session.