Trading Price Reasonability Range execution range freak trade NSE reference price limit price protection

Price Reasonability Range (PRR) and the execution range

From WebNotes, a public knowledge base. Last updated 21 June 2026. Reading time ~12 min.

Key facts

What it is	A dynamic band around a contract's reference price within which an order is allowed to match and execute
Purpose	Prevent freak trades, fills far from the prevailing market caused by fat-finger orders or thin depth
Reference price	At open, the theoretical price from the underlying; during the day, the simple average of trade prices over the last one minute, revised every minute
Typical band width	Set per contract by NSE, for example a wider percentage band on higher-priced option premiums and an absolute floor on low-priced ones
Rejection message	17070: The price is out of the current execution range
Not the same as	The daily price band or circuit filter, which is a fixed percentage of the previous close; the execution range is dynamic and intraday

The Price Reasonability Range (PRR), more often called the execution range, is a dynamic band that NSE and BSE set around a contract’s reference price, inside which an order is allowed to match and execute. It exists to prevent freak trades, fills that print far from the prevailing market because a fat-finger order or thin depth let a market order sweep through empty price levels. An order priced or matched outside the range is cancelled rather than executed. It is a market-microstructure control, not a Zerodha rule, and it is distinct from the daily price band .

This page defines the range, sets out how the reference price is computed at open and through the day, gives the band widths NSE applies, separates the execution range from the daily price band that traders routinely confuse it with, and explains the rejection message and the volatility edge case where a legitimate stop can be turned away. The mechanism is the reason an SL-M order can be refused and why exit orders sometimes bounce in a fast move.

Conflict-of-interest disclosure. This guide is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this guide does not carry it and earns no referral commission from the procedure described here.

What the execution range is

The execution range is a price band built around a reference price for each contract. Orders match and trades take place only if the trade price is within the range; an order that would execute outside it is cancelled. NSE introduced the mechanism to handle, in the exchange’s framing, fat-finger trades placed at erroneous prices and to protect traders from the impact cost of market orders in illiquid contracts. The band sits on both sides of the reference price, so it caps how far above and below the prevailing level a single execution can occur.

The control operates on execution, not on the day’s overall range. A security can travel its full daily price band over hours of trading, one minute at a time, while every individual trade still falls inside a tight execution range around the rolling reference price. The two limits answer different questions: the price band asks how far the instrument can move today; the execution range asks how far a single order can print from where the contract is trading right now.

How the reference price is computed

The band is only as good as its centre, the reference price, which NSE recomputes continuously:

At market open, the reference price is the theoretical price derived from the underlying, using implied volatility for options.
During trading hours, it is the simple average of the contract’s trade prices over the last one minute, revised every minute on a rolling basis.
For inactive or illiquid contracts with no recent trades, it is a theoretical price from the latest underlying price, revised roughly every 30 minutes.

The one-minute rolling average is the key design choice and its weakness. It keeps the band centred on real, recent trades in a normally trading contract, but it means the centre lags when trades stop, which is exactly what happens in a sharp move.

Band widths

NSE sets the half-width of the execution range per contract, scaled to the price of the instrument so that low-priced and high-priced contracts get sensible bands. For options, the published example uses a wider percentage band on higher-premium contracts, for instance a 40 per cent execution range on a premium above 50, so a reference of 500 yields a 300 to 700 band. For low-priced options the band switches to an absolute floor, for instance plus or minus 20 points around the reference, so a reference of 30 yields a 24 to 36 band rather than a percentage that would be too tight to trade. The exact tier table is maintained by NSE and updated by circular; the design principle is a percentage band that is floored by an absolute value so a cheap contract is not boxed into an untradeable range. For market and stop-loss orders, NSE additionally applies a mark-up or mark-down off the LTP, subject to a minimum absolute value in rupees, to set the furthest price the order may trade to when it triggers.

How PRR differs from the daily price band

This is the distinction that causes the most confusion, so state it plainly:

Feature	Execution range (PRR)	Daily price band / circuit filter
What it bounds	Individual order execution	The day’s total price movement
Reference point	Rolling reference price, revised every minute	Previous day’s close
Width	Per-contract band around the reference, dynamic	Fixed percentage (commonly 2, 5, 10, 20 per cent) of close
When it changes	Every minute, intraday	Set once for the day
Effect on breach	Order cancelled, contract keeps trading	Trading in the security halts at the limit

The circuit filter and circuit limits are a fixed daily cap off the previous close, and hitting one halts trading in the scrip. The execution range is recalculated every minute around a moving centre, and breaching it cancels your order without halting the contract. A separate halt does exist in options: when an option premium reaches NSE’s price limit, the exchange stops further trading in that contract, which is a distinct mechanism from the execution-range order cancellation.

The rejection message and the volatility edge case

On NSE derivatives, an order that would execute outside the range is cancelled with the message “17070: The price is out of the current execution range.” Where no valid reference price exists, a market order received in that scenario is rejected by the exchange and a message is sent to the trading terminal.

The edge case that frustrates traders is a legitimate stop or exit rejected during a fast move. Because the range refreshes from the last minute’s trade prices, a sudden move with few or no trades leaves the reference price stale, so the band has not caught up to where the contract is now trading. A stop firing at the new market level can land outside that stale range and be cancelled, the opposite of what the trader wanted at the worst moment. This is a known limitation of a trade-price-averaged band, and it is part of why the exchanges paired the execution range with the withdrawal of SL-M orders in options and pushed traders toward SL-L orders with explicit limit prices. NSE’s standing caution is that members should trade responsibly, since trading away from normal prices or causing disruption can draw inquiry and regulatory action.

What to do when an order is out of range

If an order is rejected as out of the execution range, do not simply resubmit at the same price; check the current market and the rolling reference, then price the order inside the band, or use a limit order at a level you can verify is within range. In a fast move, wait for the next one-minute refresh so the reference price catches up, then re-enter. For options especially, prefer an SL-L order with a limit you have set deliberately over a market-style order that the range may reject at the worst time. The execution range is not something you can disable; it is an exchange control, so the only response is to price inside it.

External references

References

Zerodha Z-Connect, Deciphering NSE’s execution range circular (reference price computation, band-width examples, the “17070: The price is out of the current execution range” message; as of 21 June 2026).
NSE circular on the trade execution range in the derivatives segment (reference price as the one-minute rolling average; theoretical price at open and for inactive contracts).
NSE Limit Price Protection (LPP) framework and FAQs, including mark-up and mark-down off the LTP for market and stop-loss orders.
NSE circular references NSE/CMTR and NSE/FAOP on Limit Price Protection ranges, 2025.

Frequently asked questions

What is the Price Reasonability Range?

It is a dynamic band, also called the execution range, that NSE and BSE set around a contract’s reference price. An order can only match and execute inside this band. It exists to prevent freak trades, where an order fills far from the prevailing market because of thin depth or a fat-finger price.

How is the reference price calculated?

At market open the reference price is the theoretical price derived from the underlying, using implied volatility for options. During trading hours it is the simple average of the contract’s trade prices over the last one minute, revised every minute on a rolling basis. Inactive contracts use a theoretical price revised roughly every 30 minutes.

How does PRR differ from the daily price band?

The daily price band, or circuit filter, is a fixed percentage of the previous close that caps how far a security can move in a day. The execution range is dynamic, recalculated every minute around a rolling reference price, and bounds individual order execution rather than the day’s range.

What message appears when an order is outside the range?

On NSE derivatives the order is cancelled with ‘17070: The price is out of the current execution range.’ The order does not execute; it is rejected immediately so it cannot print a freak trade.

Why was my stop-loss rejected for being outside the execution range?

The range refreshes from the last minute’s trade prices. In a fast move with few trades, the reference price may lag, so a stop firing at the new market level can land outside the stale range and be rejected. It is a known limitation of a trade-price-averaged band.

Does the execution range apply to options and futures?

Yes. NSE applies an execution range around the reference price for derivatives, with band widths set per contract, wider for higher-premium options and tighter, with an absolute floor, for low-priced ones. A market order with no valid reference price is rejected.

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: 21 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.