difference between asm and gsm in stock market

ASM reacts to how a security is trading — high-low variation, close-to-close moves, client concentration, low delivery percentage — while GSM reacts to weak financials sitting under a rising price, such as negligible net worth or almost no fixed assets. They are separate frameworks run jointly by SEBI and the exchanges, with separate triggers, and one stock can sit in both at the same time. The exchanges attach a standing disclaimer to each list: inclusion is a surveillance action about the security, not an adverse finding against the company.

a stock moved to trade-to-trade settlement can no longer be

Squared off intraday — every trade in a trade-to-trade security must settle by delivery. A buy has to be paid for in full and taken into the demat account, and a sell needs shares already sitting there, so a mistaken entry cannot be reversed within minutes as it can in ordinary rolling settlement. On the NSE these securities trade in the BE series and on the BSE in the T group, usually with a narrowed 5% or 2% band.

can I still do intraday in a stock that has entered ASM

Only by funding the whole trade, because ASM takes the margin requirement to 100% of trade value and there is nothing left to leverage once that happens. Since September 2024 short-term ASM is a single stage that raises margin without changing the settlement mode, while the long-term framework escalates through stages and at the top moves the security to trade-to-trade, where intraday squaring off stops entirely. Brokers also commonly withdraw the margin trading facility and stop accepting the stock as pledged collateral once a measure applies.

what is the additional surveillance deposit in gsm stage 2

It is a cash deposit the buyer lodges on top of the purchase price once a security reaches GSM Stage II — 50% of trade value on the NSE and 100% on the BSE, collected from the buying member. It is retained for roughly three months and is not released simply because you sell the shares. At Stage III the deposit rises to 100% of trade value and trading is permitted only on the first trading day of each week.

where can I check if a stock is under asm or gsm

On the NSE and BSE websites, which publish the ASM, GSM, ESM and trade-to-trade lists free as downloadable files, updated on a fixed cycle. Checking there before you buy is the only way to know in advance — most holders find out from an order rejection or a margin call once the measure has already taken effect. The list also tells you which framework caught the stock, which is genuinely different information: GSM points at the financials, ASM and ESM at the trading pattern.

When the exchange puts a stock under surveillance: ASM, GSM and T2T

You hold a smallcap that has run up sharply for three months. On a Tuesday evening the exchange publishes a list, and from Thursday that stock requires 100% upfront margin, cannot be traded intraday, and moves inside a 5% price band. Nothing has happened at the company. No result, no announcement, no regulatory action against it. The exchange has changed the rules that apply to the security, and the first most holders hear of it is an order rejection or a margin call from the broker.

Think of it like this

The stall the mandi keeps an eye on

In a wholesale mandi, most trading runs on trust and settlement at the end of the week. When one stall's prices start swinging wildly and the same handful of buyers keep bidding it up, the committee does not shut the stall. It says: cash upfront for this one, no credit, and you may only sell in the supervised slot. Business continues, on tighter terms.

In the market

A surveillance measure is that decision, written down and applied by rule. The stock keeps trading. What changes is the money you must have upfront, whether you may square off the same day, and in the harsher stages, when trading happens at all.

Three different things, often confused

People use ASM, GSM and trade-to-trade as if they were one escalating ladder. They are separate frameworks with separate triggers, run jointly by SEBI and the exchanges, and a stock can sit in more than one at a time. The distinction that matters is what each one is reacting to.

Framework	Reacts to	Typical effect
ASM — Additional Surveillance Measure	Price and volume behaviour: high-low variation, close-to-close moves, client concentration, low delivery percentage	Short-term ASM is a single stage of 100% margin; the long-term framework escalates through stages that add a narrowed band and, at the top, trade-to-trade
GSM — Graded Surveillance Measure	Weak financials against the price: net worth, net fixed assets, book value, price-to-earnings, market capitalisation	100% margin and a 5% band at Stage I; from Stage II a cash deposit from the buyer, and at the top stages trading only once a week
T2T — Trade-to-trade	Sustained price or volume variation, applied on a periodic review	Every trade must be settled by delivery. No intraday squaring off at all
ESM — Enhanced Surveillance Measure	High-low price variation over three, six and twelve months, in main-board companies below ₹500 crore of market capitalisation	100% margin with a 5% or 2% band; in the second stage, trade-to-trade at a 2% band, trading once a week in a periodic call auction

ASM, and what 100% margin actually means

ASM comes in a short-term and a long-term form, and since September 2024 they are not built the same way. Short-term ASM is now a single stage: 100% margin, with no change to the price band and no move to trade-to-trade. Long-term ASM still escalates through stages, adding a narrowed price band and, at the top, compulsory delivery-based settlement. The exact stage-wise conditions are published on the NSE and BSE websites. Either way it is the margin that catches most retail holders, because it is invisible until you place an order.

Worked example

The margin arithmetic, before and after

A smallcap at ₹240, buying 500 shares — order value ₹1,20,000

Before: exchange margin requirementVaries by stock; it is the VaR plus extreme loss marginAround 20% of value

Before: cash needed upfrontThe rest is funded until settlement₹24,000

After ASM: margin requirementThe whole trade must be covered100% of value

After ASM: cash needed upfrontA five-fold jump for the identical order₹1,20,000

Intraday leverageThere is nothing left to leverage once margin is 100%Gone

Existing intraday positionThis is where the margin call arrivesMust be funded or closed

Nothing about the company changed. The same 500 shares now need five times the cash on the day of purchase. If you were carrying an intraday or leveraged position in that stock when the measure took effect, the shortfall lands on you before you have read the circular.

GSM, which is the more severe framework

GSM is triggered by the financials rather than the trading pattern — a company with negligible net worth or almost no fixed assets whose share price has nonetheless risen a great deal. The stages tighten quickly, and the higher ones change the shape of the trading day itself.

How the GSM stages escalate

1
Stage I — full margin and a narrowed band
Margin on the security goes to 100% of trade value and the price band is cut to 5%, or lower where a tighter band already applies. Trading is still continuous and no deposit is collected yet. From the order screen this looks much like ASM; what differs is why the exchange put it there.
2
Stage II — compulsory delivery, plus a deposit from the buyer
The security moves to trade-to-trade, so intraday netting stops. On top of the purchase price the buyer lodges an Additional Surveillance Deposit — 50% of trade value on the NSE, 100% on the BSE — collected in cash from the buying member. It is retained for around three months and is not released simply because you sell the shares.
3
Stage III — trading once a week
Everything from Stage II, with the buyer deposit raised to 100% of trade value, and trading permitted only on the first trading day of each week. On the other days the security cannot be traded at all, so a decision to sell waits for a session that comes round once a week.
4
Stage IV — once a week, with no upward move
The weekly trade-to-trade session and the 100% deposit continue, and the price is not permitted to move up. The exit remains open in principle. The price at which it is available is set by whoever is willing to buy in that one session, and it cannot be bid higher.

Trade-to-trade, on its own

Normal settlement against trade-to-trade

Ordinary rolling settlement

Buy and sell the same day and only the net position settles
Intraday positions are permitted, with leverage from the broker
A wrong entry can be reversed within minutes at a small cost
The usual price band applies, commonly 10% or 20%

Trade-to-trade (series BE on NSE, T group on BSE)

Every trade settles by delivery — buys must be paid in full and taken into demat
No intraday squaring off, so a mistaken buy has to be paid for and sold the next day
A narrow band, usually 5% or 2%, so a gap can trap the position
Reviewed and revised periodically, so a stock can enter and leave

In the Indian market

The Enhanced Surveillance Measure, in force since 5 June 2023, applies to main-board companies with a market capitalisation below ₹500 crore — the part of the Indian market where a handful of participants can move a price and where retail entry is heaviest. It keys off high-low price variation measured over three, six and twelve months. Stage I applies 100% margin with a 5% band, or 2% where that band already applies; Stage II moves the security to trade-to-trade at a 2% band, trading once a week in a periodic call auction. A security entering the framework stays in it for a minimum of 90 calendar days. The ESM, ASM, GSM and trade-to-trade lists are all published free on the NSE and BSE websites and are updated on a fixed cycle, which is the only reliable way to find out before your broker's system tells you.

What to actually do about it

Check the lists before you buy a smallcap, not after. Both exchanges publish them as downloadable files. A stock already at ASM Stage II or GSM Stage I is a different instrument from what the price chart suggests.
Do not treat inclusion as a sell signal or a buy signal. It is a change in trading conditions. What it should change is your position size and your assumption about how quickly you could get out, not your view of the business.
Assume the exit is worse than the entry. You could buy freely in a continuous market. You may be selling into a 5% band, or into one auction a week. Size the position on the exit, which is the harder half.
Watch what it does to the rest of the account. Collateral haircuts and withdrawn margin trading facility can force unrelated positions to be trimmed. Keep enough free cash that a rule change in one holding is not an event across the portfolio.
Read why it was included. GSM points at the financials, ASM and ESM point at the trading pattern. Those are genuinely different pieces of information, and the framework tells you which one the exchange saw.

Check yourself

A stock you hold moves to GSM Stage III. What has materially changed for you?

Simple bhasha mein

Colony mein speed breaker lag gaya

Ek raat mein colony ke gate pe speed breaker aur guard lag jaata hai — aapke ghar ne kuch nahi kiya, par ab andar-bahar aana alag hai. Exchange bhi kisi stock ko ASM ya GSM mein daal deta hai: poora margin, intraday band, kabhi din mein sirf ek auction. Company waisi ki waisi, niyam badal gaye — aur list har hafte publish hoti hai.

What to remember

ASM reacts to trading behaviour, GSM to weak financials, and both are separate from trade-to-trade.
100% upfront margin removes leverage entirely and can trigger a call on positions you already hold.
Higher GSM stages cut trading to one session a week and add a cash deposit paid by the buyer.
ESM covers companies below ₹500 crore of market capitalisation; its Stage II trades in a weekly call auction.
Inclusion is a surveillance action, not an adverse finding — but it changes how you can exit.

You reached the endMark it done and keep your streak going.

Up nextShort delivery: when the seller cannot deliver the shares Previous: The schemes built for parents and senior citizens

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Common questions

Short, direct answers to what people ask about this topic.

difference between asm and gsm in stock market: ASM reacts to how a security is trading — high-low variation, close-to-close moves, client concentration, low delivery percentage — while GSM reacts to weak financials sitting under a rising price, such as negligible net worth or almost no fixed assets. They are separate frameworks run jointly by SEBI and the exchanges, with separate triggers, and one stock can sit in both at the same time. The exchanges attach a standing disclaimer to each list: inclusion is a surveillance action about the security, not an adverse finding against the company.
a stock moved to trade-to-trade settlement can no longer be: Squared off intraday — every trade in a trade-to-trade security must settle by delivery. A buy has to be paid for in full and taken into the demat account, and a sell needs shares already sitting there, so a mistaken entry cannot be reversed within minutes as it can in ordinary rolling settlement. On the NSE these securities trade in the BE series and on the BSE in the T group, usually with a narrowed 5% or 2% band.
can I still do intraday in a stock that has entered ASM: Only by funding the whole trade, because ASM takes the margin requirement to 100% of trade value and there is nothing left to leverage once that happens. Since September 2024 short-term ASM is a single stage that raises margin without changing the settlement mode, while the long-term framework escalates through stages and at the top moves the security to trade-to-trade, where intraday squaring off stops entirely. Brokers also commonly withdraw the margin trading facility and stop accepting the stock as pledged collateral once a measure applies.
what is the additional surveillance deposit in gsm stage 2: It is a cash deposit the buyer lodges on top of the purchase price once a security reaches GSM Stage II — 50% of trade value on the NSE and 100% on the BSE, collected from the buying member. It is retained for roughly three months and is not released simply because you sell the shares. At Stage III the deposit rises to 100% of trade value and trading is permitted only on the first trading day of each week.
where can I check if a stock is under asm or gsm: On the NSE and BSE websites, which publish the ASM, GSM, ESM and trade-to-trade lists free as downloadable files, updated on a fixed cycle. Checking there before you buy is the only way to know in advance — most holders find out from an order rejection or a margin call once the measure has already taken effect. The list also tells you which framework caught the stock, which is genuinely different information: GSM points at the financials, ASM and ESM at the trading pattern.