The exchanges have set a price band for all securities. The price bands act as a limit beyond which the price is not allowed to move on a particular day and the exchanges will reject orders that are set outside the minimum and the maximum of the price range.
For F&O stocks or if the stock is included on an index on which derivative products are available, such scrip won’t have an upper or lower price band. Most securities listed on the exchanges have a price band and generally price band be in the range like 2%, 5%, 10% or 20% based on a previous day close.
However, a market-wide price band is implemented through the circuit breaker system. The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by the movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier.
Read this for more information about Price Band and Circuit Breaker.