Definition
Price Band / Circuit Limit (per stock)
A price band sets the maximum percentage a stock can rise (upper circuit) or fall (lower circuit) in a single trading day.
Each stock has a daily price band, commonly 5%, 10%, or 20%, set by the exchange based on the stock's profile. If the price hits the upper limit, only buyers remain with no sellers (upper circuit); at the lower limit, only sellers remain (lower circuit), and trading effectively freezes at that price.
Stocks in the F&O segment have no fixed band but a dynamic price band that flexes during the day. Per-stock circuits differ from the market-wide index circuit breaker that halts the entire market on big Nifty/Sensex moves.
Related terms
- VolatilityVolatility measures how much and how quickly a price moves up and down — higher volatility means bigger, faster swings.
- Additional Surveillance Measure (ASM)ASM is a SEBI/exchange framework that flags stocks showing unusual price or volume activity, applying extra surveillance and trading curbs.
- Circuit BreakerA circuit breaker is a SEBI-mandated mechanism that halts trading in a single stock (via a price band) or across the whole market (index-based) when prices move too sharply in a day.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.