Understanding Circuit Limits and Circuit Breakers

A circuit limit is a price band — a maximum percentage a stock (or index) can move in a day before trading is paused or capped. It’s a safety mechanism to prevent panic and manipulation.

Upper and lower circuits

• Upper circuit — the highest price allowed that day; hit when buyers heavily outnumber sellers. You may be unable to buy because there are no sellers.
• Lower circuit — the lowest allowed price; hit when sellers overwhelm buyers, and you may be unable to sell.

Circuit percentages vary by stock (e.g. 5%, 10%, 20%) based on liquidity and surveillance category — more volatile or speculative stocks often have tighter bands and may sit under ASM/GSM surveillance.

Market-wide circuit breakers

A circuit breaker halts the entire market if a benchmark index moves sharply (e.g. 10%, 15%, 20%), with halts of increasing length. This gives everyone time to absorb information and cool off during extreme volatility.

Why it matters

If a stock is stuck at a circuit, your order may not execute — a real risk with illiquid or news-driven names. Understanding circuits helps you set realistic expectations and avoid chasing a locked stock. Education only, not advice.