What are Circuit Limits or Price Bands?

DefinitionCircuit limits, also known as price bands, act as protective measures implemented by the exchange to prevent extreme fluctuations in stock prices within a short timeframe.

PurposeThese limits are in place to ensure stability in the market and safeguard investors from rapid and unpredictable price movements.

Determining FactorsThe range of circuit limits, spanning from 2% to 20%, is determined based on factors such as liquidity, trading volume, and the category of the stocks.

Daily Trading RangeThe price band sets the permissible range within which a stock can be traded on a given day.

Locating Circuit LimitsYou can find the upper and lower circuit limits for a specific instrument in the market depth section & in the Order widget below the price tab on CubePlus, our trading platform.

Order HandlingAny orders placed outside the established price band will be rejected. If the price of a stock reaches the upper or lower limit, pending orders will be held until the circuit limits are relaxed.

Stay InformedTo keep track of circuit limits and ensure informed trading, regularly check the market depth or Order widget on CubePlus.

NoteUnderstanding circuit limits is crucial for making well-informed investment decisions and navigating the market effectively.