A stock’s price is not free to move any distance in a single day. The exchange draws a ceiling and a floor around the previous close — the upper circuit and the lower circuit — and once the price touches either, it is frozen there for the session. Understanding these bands explains a confusing experience many beginners have: a stock you desperately want to buy that you simply cannot, or one you are holding that you cannot sell.
What the percentages mean
Each stock is assigned a price band — most commonly 5%, 10% or 20% — measured from yesterday’s closing price. A 10% band means the stock can rise at most 10% (its upper circuit) or fall at most 10% (its lower circuit) today. Highly liquid index stocks and those with active derivatives usually have wide or effectively no bands; thin, volatile small caps get the narrow 5% band precisely because that is where manipulation and panic do the most damage.
| At the upper circuit | At the lower circuit |
|---|---|
| Price is locked at the day’s ceiling | Price is locked at the day’s floor |
| Only buyers, almost no sellers | Only sellers, almost no buyers |
| Easy to sell, very hard to buy | Easy to buy, very hard to sell |
| A queue of unfilled buy orders builds | A queue of unfilled sell orders builds |
Circuits are not surveillance measures
Beginners often confuse a circuit with being placed under a surveillance framework, but they are different things. A circuit limit is the ordinary daily band on every stock. Frameworks such as ASM (Additional Surveillance Measure), GSM (Graded Surveillance Measure) and trade-to-trade are targeted restrictions the exchange adds to specific stocks showing unusual price or volume activity — they can tighten the band, add margins or block intraday and BTST trades. The surveillance-measures lesson covers those; a circuit is the baseline that exists with or without them.
A stock is locked at its lower circuit and you are holding it. What is your realistic situation?
Har stock ki ek roz ki hadd hoti hai — kal ke bhaav se 5%, 10% ya 20% upar (upper circuit) aur utna hi neeche (lower circuit). Upper circuit pe sirf khareedne wale, bechne wala koi nahi — isiliye bechna aasaan, khareedna almost namumkin. Lower circuit pe ulta — bechne walon ki line, khareedne wala koi nahi, aur aap phas jaate ho. Chhoti company ki 5% hadd matlab woh patli, phasane wali stock hai — soch ke ghuso.
- Upper and lower circuits are the daily ceiling and floor, set as a percent of yesterday’s close.
- Common bands are 5%, 10% and 20%; the thinnest, most volatile stocks get the narrow 5% band.
- At the upper circuit selling is easy and buying is hard; at the lower circuit it reverses.
- A circuit is a liquidity trap — you can be locked out of buying, or locked into a position.
- Circuits are the everyday band on all stocks; ASM/GSM are extra measures on flagged ones.
Mark it done to track your progress through the curriculum.
Common questions
Short, direct answers to what people ask about this topic.
- what happens when a stock hits the upper circuit
- When a stock hits its upper circuit it has reached the highest price allowed for the day, set as a fixed percentage above the previous close, and it cannot rise any further that session. At that point there are only buyers and almost no sellers, so the price freezes at the ceiling and a queue of unfilled buy orders builds up. The stock can stay locked there until the close, and if the buying pressure continues it may open the next day and lock again, each day building a fresh band on the new close.
- can i sell a stock that is in upper circuit
- You can place a sell order in an upper circuit, and because everyone else is trying to buy, a seller is usually filled quickly — the imbalance is all on the buy side. Buying is the hard part: with the price frozen at the ceiling and only buyers queued, most buy orders sit unexecuted. It is the mirror image at the lower circuit, where selling becomes almost impossible because there are no buyers and you can be stuck holding a falling stock.
- why can i not buy a stock in upper circuit
- Because at the upper circuit the price cannot rise any further that day, so every buyer is queued at the same ceiling price and there are almost no sellers willing to part with the stock. Your buy order joins a long queue and is filled only if a seller appears, which is rare while the news driving the move is still fresh. This is why chasing a stock already locked at its upper circuit is difficult — you are competing with a wall of other buyers for shares nobody wants to sell.
- what is the difference between a circuit limit and a surveillance measure like ASM
- A circuit limit is a daily price band that caps how far a stock can move up or down in one session, and it applies to every stock. A surveillance measure such as ASM or GSM is a separate framework the exchange places on specific stocks showing unusual activity — it can tighten the price band, force trade-to-trade settlement or add margins, but it is targeted, not universal. In short, circuits are the everyday ceiling and floor on all stocks; ASM/GSM are extra restrictions layered on suspicious ones.
- what is a market wide circuit breaker in india
- A market-wide circuit breaker halts trading across the entire market — not one stock — when a benchmark index like the Nifty 50 or Sensex moves sharply. The trigger levels are 10%, 15% and 20%, and the halt length depends on the level and the time of day, ranging from a short pause to a stop for the rest of the session. It is a coordinated cooling-off applied to the whole exchange during an extreme fall or rise, distinct from the individual price bands on single stocks.