What a circuit limit is

A price band — in everyday speech a circuit limit or circuit filter — is the furthest a stock’s price is allowed to move from the previous day’s close in a single session. On the NSE and BSE the bands come in fixed sizes: 2%, 5%, 10% or 20% either way, with the exchange publishing each stock’s band daily (NSE, price bands; daily list). SEBI (the Securities and Exchange Board of India) allows “individual scrip wise price bands up to 20% either way” for stocks without derivatives (SEBI Master Circular for Stock Exchanges and Clearing Corporations, SEBI/HO/MRD2/PoD-2/CIR/P/2023/171, 16 October 2023, para 2.3.1).

When a stock hits the top of its band it is at upper circuit; at the bottom, lower circuit. Trading doesn’t stop. Orders simply can’t be placed outside the band. So a stock at upper circuit usually shows a long queue of buyers at the limit price and no sellers — it’s “locked”, and a buy order may sit there all day unfilled.

Stocks that have futures and options (F&O) trading work differently. They have no fixed band, only a dynamic one: it starts at 10% of the previous close and can be widened (“flexed”) during the day if trades keep hitting it. Since SEBI’s circular of 24 May 2024 (SEBI/HO/MRD/TPD-1/P/CIR/2024/58), the flexes come in steps of 5%, then 3%, then 2%, with cooling-off periods in between, and the band slides rather than just widening — the lower limit moves up when the upper one is flexed. NSE put the sliding part live from 18 November 2024 (NSE/FAOP/64995, 8 November 2024). Britannia is an F&O stock, so it has no fixed circuit.

Then there’s a second, bigger switch. A market-wide circuit breaker (MWCB) halts all equity and equity-derivative trading across the country when the Nifty 50 or the Sensex, whichever gets there first, falls or rises 10%, 15% or 20% from its previous close (SEBI CIR/MRD/DP/25/2013, 3 September 2013).

The rule

Upper circuit = Previous close × (1 + band)
Lower circuit = Previous close × (1 − band)
                (rounded to the tick size by the exchange)

MWCB trigger levels = Previous day's index close × (1 ± 10%, 15%, 20%)

How long the market stops depends on when the index gets there (NSE, market-wide circuit breakers):

Trigger Hit Trading halts for Then
10% before 1:00 pm 45 minutes 15-minute pre-open call auction
10% 1:00 pm to 2:30 pm 15 minutes 15-minute pre-open call auction
10% at or after 2:30 pm no halt —
15% before 1:00 pm 1 hour 45 minutes 15-minute pre-open call auction
15% 1:00 pm to before 2:00 pm 45 minutes 15-minute pre-open call auction
15% on or after 2:00 pm rest of the day —
20% any time rest of the day —

Worked example: Desi Bites’ band, and the market’s

A stock band. Desi Bites Foods (our fictional company) has no F&O contracts, so it gets a fixed band. Suppose it closed at ₹630 yesterday (a hypothetical price). Its limits for today, under each possible band:

Band Upper circuit Lower circuit
2% ₹642.6 ₹617.4
5% ₹661.5 ₹598.5
10% ₹693 ₹567
20% ₹756 ₹504

If Desi Bites sits in the 5% band and some good news lands, the most it can rise today is to ₹661.5. Tomorrow the band resets around that close, so a big re-rating plays out as several days of upper circuits rather than one jump — with most buyers unfilled each day.

A new listing has its own rule. On listing day the stock trades in a one-hour pre-open call auction with no band; after that, an issue of up to ₹250 crore (Desi Bites’ ₹16 crore IPO included) gets a 5% band around the auction price and trades in the “trade-for-trade” segment — every trade must be settled by delivery, no intraday netting — for its first 10 days; larger issues get a 20% band (SEBI Master Circular, 2023, paras 2.6 and 17.2).

The market’s switch. The Nifty 50 closed at 22,331.4 on 30 March 2026 (price index, Yahoo Finance; for illustration only). The next session’s downside trigger levels would have been roughly:

Fall Points Nifty level
10% 2,233.14 20,098.26
15% 3,349.71 18,981.69
20% 4,466.28 17,865.12

These are rare. The last cluster came in the COVID crash: SEBI’s annual report for 2019-20 records circuit filters being hit “three times in India” that year (SEBI Annual Report 2019-20, p. 2). In our closing-price data, the Nifty closed at 7,610.25 on 23 March 2020, down 12.98% from 8,745.45 the previous session — below that day’s 10% trigger (7,870.91) but above the 15% one (7,433.63). The rule also works upwards: on 18 May 2009, the day after the general-election results, the market was halted twice as the Nifty rose past its upper triggers and closed for the rest of the day (NSE press release, 18 May 2009).

🧒 Explain it like I'm 10 (optional — skip if this is already clear)

In a school auction for a cricket bat, the teacher says: “No bid today can be more than ₹10 above yesterday’s price.” If everyone wants the bat, the price still only goes up ₹10 today, and lots of kids go home without it. Tomorrow it can go up another ₹10.

And if the whole school starts shouting at once, the principal rings a bell and everyone sits down for 45 minutes to calm down. That’s the market-wide circuit breaker.

Common mistakes

  • Reading “upper circuit” as proof of demand you can act on. A locked upper circuit means the queue of buyers is longer than the queue of sellers at a capped price. Your order joins the back of that queue. And small, thin stocks can hit circuit on very little volume, which is exactly why the exchanges watch them (the surveillance post covers how).
  • Thinking the band limits your loss. A lower circuit stops the price printing lower today; it doesn’t let you sell. Locked lower circuits with no buyers can run for days, and the loss arrives anyway.
  • Assuming every stock has a circuit. F&O stocks, Britannia among them, have a dynamic band that widens during the day. A 15% intraday move is possible there in a way it isn’t for a stock in the 5% band.
  • Confusing the stock band with the market-wide breaker. One caps a single share’s move and never stops trading; the other stops the whole market. They’re different tools set by different rules.

Takeaway: a circuit limit caps how far one stock’s price can move in a day; it doesn’t stop trading and it doesn’t guarantee you a fill. The market-wide breaker is the separate, rarely used switch that halts everything when the Nifty or Sensex moves 10%, 15% or 20%.