What happens at the upper/lower circuits?

What Happens at the Upper/Lower Circuits?

Circuit limits act like speed breakers to curb extreme price moves. When a stock hits its daily upper or lower circuit, order matching can change sharply. Market-wide circuit breakers can also pause trading across the exchange and impact your open orders.

Stock level circuits

Upper circuit (price at the day’s max limit)

  • Order book shape: Only buyers remain; bids exist, but no offers.
  • If you hold the stock: You can sell at the upper circuit price.
  • If you want to buy: You cannot buy because there are no sellers to match.
  • Example: XYZ hits ₹120. You can place a sell at ₹120; buy orders wait with no sellers.

Lower circuit (price at the day’s min limit)

  • Order book shape: Only sellers remain; offers exist, but no bids.
  • If you want to sell: You cannot sell because no buyers are available.
  • If you want to buy: You may buy if buy demand returns and matches the offers.
  • Example: ABC hits ₹80. Sells stack at ₹80, but without buyers, orders do not execute.

Market-wide circuit breakers

  • What they are: Index-based halts when NIFTY 50 or Sensex moves by 10%, 15%, or 20% in either direction.
  • Pending orders: If a market-wide circuit triggers, open or unexecuted orders are cancelled by the exchange.
  • Existing positions: Remain open if you have sufficient margin.
  • Margin shortfall: FYERS RMS may square off positions if margins are inadequate during or after the halt.

Commodities example

Commodity circuit bands are product-specific. For crude oil, a common pattern is a 4% base band, then 6%, a 15-minute cooling off, then 9%, with possible further 3% step relaxations if required by international moves.

How to handle orders around circuits?

  1. Verify depth and spreads before sending orders near the band.
  2. Prefer limit orders so you control the execution price.
  3. After a market-wide halt, re-enter orders if needed because prior pending orders may be cancelled.
  4. Monitor margins during high volatility to avoid risky actions.
Use limit orders and check order book depth near circuit levels, and re-enter orders after market-wide halts if the exchange cancelled your pending orders.

What if...

ScenarioOutcome
Stock hits upper circuitYou can sell at the circuit price, but cannot buy due to no sellers.
Stock hits the lower circuitYou may place buy orders, but cannot sell due to no buyers.
I place an order during the circuit lockOrder remains pending unless the price range reopens and a counterparty appears.
Market-wide circuit breaker triggersOpen unexecuted orders are cancelled; positions stay open if margins are sufficient.
I do not have enough margin during a haltFYERS RMS may square off positions to manage risk.
I trade commoditiesBands are product-specific; some allow staged relaxations with cooling-off periods.

Last updated: 07 Nov 2025