There is something that has become increasingly popular in our country in recent years: Stock exchange. With inflation reaching high levels, people are turning to alternatives like the stock market to protect their money and even add value.

Naturally, people new to this field will encounter many new terms. Especially against people who participate in public offers.The stock reaches a ceiling of 10Statements like ” may appear. Do you know exactly what these statements mean?

You will not encounter terms such as ceiling or floor in the American stock markets. These two terms Valid for Borsa Istanbul. They are extremely important because most of the investors in our country are in Borsa Istanbul.

In fact, the logic of the terms ceiling and floor is extremely simple.

Imagine you are on the fourth floor of an apartment building. Even though you’re high up, you can’t actually go lower than the bottom of the fourth floor. At the same time, no matter how hard you jump, you cannot go further than the ceiling. Borsa IstanbulThe floor-ceiling application is actually exactly this.

The floor-ceiling application represents the highest or lowest price that stocks traded on Borsa Istanbul can rise on the same day. At this rate they started that day 10 percent less or 10 percent more than the price. Let’s explain this with an example:

Suppose you bought a 100 TL share of company X. This share had a very good day and increased in value due to continuous new purchases. In Borsa Istanbul, no matter how good the stock is, it can increase within 1 day. the maximum value is 10 percent. In other words, the stock In the same way, even if the same stock has a very bad day, the maximum value it can drop will be 90 TL.

Each new day is based on the previous day’s closing date.

The shares you bought reached their ceiling within 1 day and reached 110 TL. When the markets open the next day, a ceiling and floor limit of 10 percent will apply again. So when it hits the ceiling again on the second day, this time It will reach the ceiling at 111 TL, not 110 TL. Because 10 percent of 110 TL corresponds to 11 TL.

How do IPOs hit the ceiling one after another?

Public offers are usually divided into equal parts and there are stocks that are very profitable (this is obviously not investment advice).

People who buy shares of companies that have just entered the stock market are hit with successive caps when these shares start trading. This is actually because Buy orders for new stock purchases. In other words, after these new shares are offered to the public, millions of people place purchase orders, but not all of the orders placed by these people are fulfilled. Because normally the purchase orders given go far beyond Borsa Istanbul’s 10 percent ceiling.

This way, the newly entered stock usually spikes a few times and then starts trading normally. Of course, this time if a stock started with a sell order instead of a buy order Seeing the floor instead of the ceiling we would start.

How will trading continue on other exchanges?

We said that the floor and ceiling application is specific to Borsa Istanbul. For example, because there is no such practice in the US stock market, a stock is sold We can see it gaining 60 percent in value or losing 80 percent in one day.

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