Price Limits: How Far a Stock Can Move in a Day
Most main-board stocks can move at most 10% a day, ChiNext and STAR stocks 20%; at the limit-up price buy orders queue up and you may not get filled at all.
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Text version · China A-Share Rules, lesson 4: “Price Limits: How Far a Stock Can Move in a Day”
Most main-board stocks can move at most 10% a day, ChiNext and STAR stocks 20%; at the limit-up price buy orders queue up and you may not get filled at all.
Daily moves are capped
The price limit is based on the previous close, rounded to 0.01 yuan: main board ±10%, ChiNext and STAR Market ±20%, Beijing Stock Exchange ±30%.
At limit-up, buy orders queue up
The price can't go any higher, so buyers can only queue at the limit-up price; every sell order that appears goes to whoever is first in line, and those further back often get nothing. At limit-down it's the other way round.
No limit for new stocks' first days
Under the registration-based IPO system, new listings have no price limit for their first 5 trading days (only the first day on the Beijing Stock Exchange), so they can move several times over in a day. That's very risky.
Key takeaways
- Limit-up and limit-down prices are based on the previous close, rounded to 0.01 yuan: main board ±10%, ChiNext and STAR Market ±20%, Beijing Stock Exchange ±30%.
- At limit-up, sell orders are scarce and buy orders queue up, so those further back often don't fill; at limit-down it's the reverse, and you may not be able to sell.
- Price limits don't change the impact of news; they just spread one big move over several days.
- New listings under the registration system have no price limit for their first 5 trading days (only the first day on the Beijing Stock Exchange), so swings can be huge.
Try it yourself
You can do these exercises in this lesson's interactive simulation:
- Keep the main board and a previous close of 9.87: what are today's limit-up and limit-down prices?
- Drag “News shock” to +30% and press ▶: how many days does the price take to reach fair value? Where does it close each day?
- Switch to ChiNext and play again: how does the number of days change?
- Choose “Newly listed”: what happens on day one?
Quiz and explanations
- 1. A main-board stock closed at 9.87 yuan yesterday. What's today's limit-up price?
- Answer: 10.86 yuan.9.87 × 1.1 = 10.857, which rounds to 10.86 yuan.
- 2. A stock is locked at limit-up and you place a buy order at the limit-up price. What happens?
- Answer: It queues by price and time priority and may never fill.The price can't go above limit-up, and orders at the same price queue by time, so buy orders further back may not fill.
- 3. A STAR Market stock closed at 50 yuan yesterday. What's the lowest it can fall today?
- Answer: 40 yuan.The STAR Market's price limit is ±20%: 50 × 0.8 = 40 yuan.
Terms in this lesson
- main board (Main Board): The main segment of the Shanghai and Shenzhen stock exchanges, mostly established large and mid-size companies; the daily price limit is generally ±10% and there's no asset requirement.
- price limit (Price Limit): Some markets cap how far a stock can move in a day (±10% for most Chinese main-board stocks); hitting the cap is limit-up, hitting the floor is limit-down.
- registration-based IPO system (Registration-Based IPO): The system in which new listings are reviewed by the exchange and registered with the CSRC, fully in place for A-shares since 2023; new stocks listed under it have no price limit for their first 5 trading days (only the first day on the Beijing Stock Exchange).