Circuit limits act as speed breakers in stock trading, preventing extreme price volatility by capping how much a stock can move in a single day. When a stock hits either the upper or lower circuit, trading behavior changes dramatically.
When a stock hits the upper circuit, it has reached the maximum allowed price increase for the day.
Example:
XYZ stock hits its upper circuit at ₹120. You can place a sell order at ₹120, but if you're trying to buy, your order will remain pending due to no sellers.
When a stock hits the lower circuit, it has dropped to the maximum allowed decline for the day.
Example:
ABC stock hits the lower circuit at ₹80. Sellers place ask orders at ₹80, but without any buyers, these orders remain unexecuted.
Scenario | Outcome |
---|---|
Stock hits upper circuit | You can sell, but can’t buy due to no sellers |
Stock hits lower circuit | You can place buy orders, but can’t sell as no buyers |
You place an order during circuit lock | Order remains pending unless price range opens up |
Market stabilizes | Normal trading resumes once bid/ask balance returns |
Last updated: 25 Jun 2025