Why does the stock market have a daily limit and a daily limit mechanism?

Because the ups and downs are unique characteristics of China stock market, there is no limit to the ups and downs of foreign stock markets. It can be said that this is also because of the unique composition of the China stock market.

If T+ 1 is a restriction on retail investors, then the limit of daily limit must be a restriction institution. The biggest limitation is to prevent institutions from manipulating individual stocks at will, increase costs and lengthen the cycle, thus failing to achieve the purpose of speculation!

For investors in China stock market, chasing up and killing down is normal, and they like speculation and short-term games. If there is no price limit, it will lead to the escalation of chasing up and killing down, causing unnecessary risks and great damage to investors' own interests! As we all know, the main process of sitting in the village is often to attract funds in the bottom area, and the high position is good for shipment, while the retail investors are just the opposite. When the bottom is not good, they can't stand the loss and start cutting meat. When the high position is good, they can't see others making money and start buying at the high position. If the price limit is up and down, then retail investors will be pulled to buy high and sell low, and the loss will be very painful!

Therefore, in the China stock market, the price limit is for institutions, while the operation of T+ 1 is for retail investors! For A-shares with 70% funds as individual investors, it can be said to be a protection mechanism! What is avoided is that retail investors are further reduced by the main force to reduce such damage in an orderly manner!