Regulation Circuit filter Price band SEBI

Circuit filters on NSE and BSE

From WebNotes, a public knowledge base. Last updated 20 May 2026. Reading time ~5 min.

Circuit filters (price bands) on NSE and BSE limit how far an individual scrip’s price can move in a single trading day, expressed as a percentage of the previous close. Index-level circuit halts pause the entire market on extreme moves. Together they manage extreme volatility and prevent panic-driven price discovery.

Scrip-level circuit filters

Each listed scrip has a daily price band assigned by the exchange. The bands are:

Band	Typical use
2%	Heavily surveilled scrips (ASM Stage 3-4, GSM Stage 4-6)
5%	Some surveilled scrips
10%	Default for many mid / small-cap scrips
20%	Default for many large / mid-cap scrips
No band	Some F&O stocks (no daily price cap)

The band applies in both directions: if the previous close is Rs 100 and the band is 10%, the day’s permissible range is Rs 90 (lower circuit) to Rs 110 (upper circuit).

What happens when a circuit is hit

Upper circuit

When the price reaches the upper circuit (top of the band):

No more buy orders match at the circuit price.
Sellers can still sell into the circuit (matching the existing buy orders queued at the circuit price).
New buy orders queue but don’t execute (they sit waiting).

For sellers: a lucky day; you get the day’s maximum. For buyers: cannot buy; the queue at upper circuit price is typically long.

Lower circuit

Reverse: the price has fallen to the lower circuit (bottom of the band).

No more sell orders match.
Buyers can buy into the circuit (matching existing sell orders queued).
Sellers queue but don’t execute.

For sellers: cannot sell; queue at lower circuit price. For buyers: opportunity (if you have conviction).

Implications for retail traders

Stuck at circuit

A scrip locked at upper or lower circuit cannot be traded out of. If you hold a position in a falling scrip that has been locked at lower circuit for multiple days, you cannot exit. The position MTM continues to deteriorate.

This is one reason why aggressive momentum trading on small / mid-caps is risky: you can get caught on the wrong side.

Liquidity concentration

At the circuit price, all unfilled orders queue. Time priority determines who matches when liquidity arrives. The earliest queued orders match first.

Circuit expansion

If a scrip remains at the circuit for a defined period (e.g., 30 minutes), the exchange may temporarily expand the band:

10% becomes 20% temporarily.
This allows continued matching at wider prices.
The mechanism is intended to prevent permanent lock at circuit.

The expansion rules vary; check NSE / BSE circulars for current logic.

Index-level circuit halts

In addition to scrip-level bands, indices (Nifty 50, Sensex) have circuit-halt triggers that pause the entire equity market:

Trigger	Pause duration
10% move	45-minute trading halt
15% move	105-minute halt
20% move	Trading halted for the rest of the day

These triggers apply both ways (up or down). The pauses are mandated to allow participants to reassess the move and prevent disorderly trading.

Index circuits trigger rarely in normal markets; notable events:

March 2020 (COVID-19 crash): multiple circuit triggers.
2008 financial crisis: multiple triggers.
2024 election-day volatility: limited triggers.

Pre-market circuit filter

The first 15 minutes of trading (09:15 to 09:30) has slightly different circuit rules:

Newly listed IPOs may have wider bands initially.
Heavy gap-up or gap-down at open may trigger circuit halt immediately.

Removing circuit filters

Circuit bands are not lifted on a per-scrip whim. Removal requires:

Sustained normalisation of price activity.
Exchange surveillance committee review.
For surveilled scrips, exit from ASM / GSM stages.

Circuit filter on F&O contracts

F&O contracts have their own circuit filters, often tighter than the underlying equity:

Stock options circuit: typically 20% of underlying price.
Index options: percentage of the underlying index value.
The circuit may be “soft” (operational restriction) vs “hard” (no further trades).

How Zerodha handles circuit

Kite shows the circuit band on the market depth panel alongside other metrics. When the scrip is at circuit:

The LTP carries an indicator.
Order placement at circuit price queues the order.
Selling at lower circuit price succeeds if matched against an existing buy.

External references

References

SEBI, Price band and circuit filter framework, sebi.gov.in.
NSE India, Daily price band methodology and circuit halts, nseindia.com.
BSE India, Price band rules, bseindia.com.
Zerodha Support, Circuit filters on Kite, support.zerodha.com.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 20 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.