Circuit limit (price band)

A circuit limit is the most a stock can move in a day. NSE sets bands of 2%, 5%, 10% or 20% from the previous close for each stock. When a stock hits its upper or lower circuit, trading continues only within the band, so buyers or sellers may find no one to trade with.

Stocks in the futures and options segment have no fixed band and use wider dynamic limits instead. Separately, the whole market halts if the Nifty or Sensex falls 10%, 15% or 20% in a day.

A stock stuck at its lower circuit can make a stop loss impossible to fill, which is one reason to size positions in small, volatile stocks carefully.