Buying Limit or BL is the amount of money that you set set aside from your bank account for share trading + the amount realized from the sale of any shares you may have previously made - any purchases you have made.
Buying Limit tells an investor his limit for a given settlement for the desired stock exchange.
Example:
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| Buying Limit |
Suppose you have $ 100,000 in your Bank A/C and you set aside $ 50,000 to purchase shares. Here your Buying Limit is $ 50,000.
If you have sold shares worth $ 100,000 on the Treading Day or the day before, your buying limit goes upto $ 150,000. This means that you can buy shares worth $ 150,000. If you buy shares worth $ 50,000 on the Trading Day then your Buying Limit gets reduced to $ 100,000.
References & Resources:
- How Stock Market Works?
- Indian Stock Market
- What is Rolling Settlement?
- What is Dematerialization?
- What is Short in Share Trading?
- What is Margin Trading?
- Stock Order Types
- Circuit Filters and Trading Bands
- What is Badla Financing?
- What is Securities Lending?
- What is Insider Trading?
- What is Intraday Share Trading or Margin Trading?
- What is Limit Order
- Share Dealing
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