Market structure & regulation
What is Circuit limit?
Also called: Upper circuit, Lower circuit, Price band
Hinglish mein padhein: Upper circuit aur lower circuit kya hota hai?
A circuit limit is the maximum a stock's price may move in one day — typically 2%, 5%, 10% or 20% — set by the exchange.
When a stock hits its upper circuit there are only buyers; at the lower circuit only sellers. Trading can freeze at that price for the rest of the day.
Index-wide circuit breakers at 10%, 15% and 20% moves in the Nifty or Sensex halt the whole market for a set time.