NSE Behaviour When a Stock Hits the -10% Lower Price Limit

When a stock at the Nairobi Securities Exchange (NSE) reaches the -10% lower price limit, trading behavior changes immediately: offers/ask/supply block the lowest price, and the bid/demand side is effectively empty.

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🔵 1️⃣ SELLING During a Limit-Down (-10%)

✅ What Actually Happens

• When a stock hits the lower limit (e.g., from 10.00 to 9.00):
• 9.00 becomes the ONLY price buyers and sellers can use if it is the lowest price for that day and the bid/demand side is empty.
• You cannot sell at 9.10, 9.20, or any higher price until prices move up and open up the buy-side for orders to queue.
• The system locks the price at 9.00.

Price Range: 9.00 – 11.00 and opening price is 10

Bid Price	Bid Qty	Offer Qty	Offer Price
		120,400	9.00
		32,500	9.10
		18,200	9.20
		9,750	9.30
		6,100	9.40
		4,350	9.50
		2,900	9.60
		1,700	9.70
		900	9.80
		500	9.90

🧊 What the Sell Queue Looks Like

• Sellers form a queue at exactly 9.00 and the bid/demand side is empty.
• They are matched on a first-come, first-served basis, and all sell orders are executed only at the capped lower price.
• If buyers don’t place orders → no trades happen, even though sellers are queued.

✔ Advice for Traders During Limit-Down

• Place a Limit Sell at the lower limit (only allowed price).
• Queue early — pre-open gives best position.
• Check the sell-side depth: if many units are ahead of you, chances of filling are very low.
• Understand: you will NOT be filled unless a buyer places enough buy orders to clear the queue and orders ahead of you.

🔵 2️⃣ BUYING During a Limit-Down (-10%)

✅ What Actually Happens

• Buyers can only place orders at the lower limit price (e.g., 9.00).
• Bid/demand side is empty below the lower limit, meaning no buy orders can queue at lower prices since the lowest price is blocked by sell orders.
• Any attempt to place buy orders below the lower limit is rejected by the system.
• The system locks the highest price for buyers.

🧊 What the Buy Queue Looks Like

• Buyers cannot queue below the lower limit.
• Execution happens on a first-come, first-served basis at available sell orders.

🔑 Key Takeaways

For Sellers:

• At limit-down, only one price exists: the lower limit.
• You cannot sell at higher prices.
• You must queue at the capped price and hope buyers appear.
• Market orders fail if no quantity is available.

For Buyers:

• Buying at the limit or market gives instant liquidity if demand exists.
• Holding is a strategy, but risky if sentiment flips the next day.