Stocks with EXTREME Movements? | High-Low Circuit & Free Float | CFA Level 1 | The Valuation School

Ever wondered why some stocks hit upper circuit after upper circuit… and then suddenly crash with no exit?

It’s rarely about fundamentals.
Most of the time, it’s a free-float problem.

When very few shares are actually available for trading, even small demand can push prices up aggressively.
FOMO kicks in. Supply disappears. Circuits lock.

But when the same stock starts falling, liquidity vanishes again — and retail investors are the ones stuck without buyers.

This is why low free-float stocks look exciting on the way up but turn brutal on the way down.

In CFA Level 1, this is a basic yet powerful lesson:
Price movement ≠ value creation. Liquidity matters.

Before chasing circuits, always ask one question:
“How many shares are actually trading in the market?”

Because in markets, easy money is often the most expensive lesson.

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