Circuit Limits

Circuit limits are exchange-set daily price bands on individual stocks — commonly 2%, 5%, 10% or 20% — beyond which orders outside the band are not accepted; hitting the band is called being 'locked in upper (or lower) circuit'.

Price bands exist to contain panic moves and manipulation. Each stock is assigned a band by the exchange based on its risk profile; less-liquid and surveillance-flagged stocks get the tightest bands, while stocks with derivatives on them generally have no fixed daily band and instead use dynamic operating ranges that can be flexed intraday.

A stock 'in upper circuit' has buyers queued with no sellers at the permitted maximum price — trading effectively pauses at that price. In lower circuit it is the reverse, and exiting can be genuinely difficult, which is the practical risk of holding illiquid, band-bound stocks through bad news.

Separately, market-wide circuit breakers act on the benchmark indices: moves of 10%, 15% and 20% trigger progressively longer trading halts for the entire market, a mechanism used only in extreme sessions.

How stocks tend to react

Material news on tightly-banded stocks often plays out as consecutive days of circuit moves rather than one big repricing, because each day's move is capped. That stretches the reaction out and can trap late buyers or sellers — one reason knowing the news within minutes matters more for small caps.

MarketPing measures this instead of guessing: every analysed announcement carries the stock's actual price reaction across 14 horizons, and the Reaction Lab aggregates how each category of announcement has historically moved stocks.

Related terms

Educational content, not investment advice. Regulations and tax rules change — verify current rules before acting.