| You may have heard the phrases “limit up” or “limit down” being associated with investing in the stock market. But do you know what they really mean? There are two trading sessions in a day on Bursa Malaysia, a morning and an afternoon session. For each trading session, Bursa Malaysia imposes a limit on the highest and lowest price that securities (which include shares of a public-listed company) can be traded. The limit is currently fixed at 30% of the closing price of the previous trading session. But, for securities with a closing price of below RM1, the limit is at 30 sen or 60 minimum bids.
Note: Minimum bid is the permissible change on the offer to buy price over the previous done or quoted price. For stock with a value of less than RM1, one bid is equivalent to ½ sen. Refer to the minimum bids table at the end of this article. |
For a morning trading session, the limit is based on the closing price of the previous day's afternoon trading session. Conversely, the limit for an afternoon trading session is based on the closing price of the morning session of the same day.
Closing price below RM1 For a counter with a closing price of below RM1 , the highest price, i.e. “limit up”, or lowest price, i.e. “limit down”, for its shares to be traded is 30 sen or 60 bids above or below the closing price. Example:
Closing price of ABC Bhd from the previous trading session |
Upper limit price (limit up) |
Lower limit price (limit down) |
RM0.995 |
RM1.29
(RM0.995 + 30 sen = RM1.295 –rounded to the lower bid: RM1.29) |
RM0.69
(RM0.995 – 30 sen = RM0.695 – rounded to the lower bid: RM0.69) |
Closing price above RM1
If the closing price of the share is above RM1 , the highest price, i.e. “limit-up”, that it can be traded is 30% above the closing price. Conversely, the lowest price, i.e. “limit-down”, for the share to be traded during the session is 30% below the closing price.
Example:
Closing price of ABC Bhd from the previous trading session |
Upper limit price (limit up) |
Lower limit price (limit down) |
RM1.50
(30% of RM1.50 = 45 sen) |
RM1.95
30% above closing price:
RM1.50 + 45 sen (30%)
= RM1.95 |
RM1.05
30% below closing price:
RM1.50 – 45 sen (30%)
= RM1.05 |
Minimum Bids Table
Minimum bids for different price ranges |
Market price of share |
Minimum bids |
Below RM1.00 |
1/2 sen |
RM1.00 up to RM2.99 |
1 sen |
RM3.00 up to RM4.98 |
2 sen |
RM5.00 up to RM9.95 |
5 sen |
RM10.00 up to RM24.90 |
10 sen |
RM25.00 up to RM99.75 |
25 sen |
RM100.00 and above |
50 sen |
Source: www.bursamalaysia.com |
