What are circuit limits or price bands?

What are circuit limits or price bands?

Circuit limits also referred to as price bands, are protective measures implemented by the exchange to regulate significant price fluctuations in stocks over a short period. When a security's price hits the upper or lower circuit limit set by the exchange, orders for that specific stock or contract (such as EQ, FNO, CDS, or MCX) are halted at that circuit price.

These price bands determine the allowable price range for stock trading on a given day. Ranging from 2 to 20%, circuit limits are determined based on factors such as liquidity, trading volume, and the category of stocks. Information about the upper and lower circuits for a specific instrument can be accessed through the market depth feature on the 5paisa platform.



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