What is the full form of LCL in the Share Market?

The LCL full form in the share market is Lower Circuit Limit. This is a very useful metric that regulates the extreme movement of price in the securities and stocks. The lower circuit limit is part of a price band. They are put in place to prevent the stocks from getting oversold or overbought, as both can result in volatile market conditions.

Significance of LCL:

LCL is the maximum drop in the price of the stock in a trading session. A stock that reaches its lower circuit also experiences a temporary suspension of trading. This is to stop investors from dumping the shares at depressed prices in the future, which could lead to a meltdown in the market.

How is LCL calculated?

It is significant to note that the calculation of the upper and lower circuits is dependent on the stock’s prior closing price. The stock exchange sets the percentage rise or reduction, which varies from stock to stock. The SEBI regulates the circuit filters to encourage stability in the stock market. Investors should always to aware of the LCL and upper circuit limit while making their investment decisions.