What Are Upper and Lower Circuits in the Stock Market?
Published 2026-10-16 · Aadarna Stock Broking Pvt. Ltd.
Key takeaways
- A circuit limit, or price band, is the maximum a share's price can move up or down in a day.
- When a share hits its upper circuit there may be only buyers; at its lower circuit, only sellers.
- Market-wide circuit breakers can halt trading across the whole market after a very large index move.
- A circuit is a safety mechanism, not a signal that a share is good or bad.
Sometimes you try to buy or sell a share and your order just sits there, unexecuted. Often the reason is that the share has hit its circuit limit. This guide explains what circuit limits are, why exchanges use them and how they affect your orders.
What is a circuit limit?
Stock exchanges set a price band for most shares: a range within which the share can trade on a given day, measured from the previous day's closing price. The top of the range is the upper circuit and the bottom is the lower circuit.
Orders outside the band are not accepted. The exchanges decide the band for each share based on factors such as its volatility, and they can change it. You can see a share's current price band on the exchange websites and in most trading apps.
Upper circuit
When a share hits its upper circuit, its price cannot rise further that day. Usually there are many buyers waiting at that price and very few or no sellers. If you place a buy order, it may stay pending and never execute.
Lower circuit
When a share hits its lower circuit, its price cannot fall further that day. There may be many sellers and few or no buyers. If you hold the share and want to sell, your order may not execute, and you may be stuck with the position until buyers return. This is one of the real risks of holding small, thinly traded shares.
Market-wide circuit breakers
Apart from limits on individual shares, there are market-wide circuit breakers. If a benchmark index moves by a very large amount in one session, trading across the market is halted for a period, to let investors pause and absorb the news. The trigger levels and halt durations are set by SEBI and the exchanges and are published on their websites.
Shares without a fixed price band
Some shares, typically those on which derivatives trade, do not have a fixed daily price band. Instead, the exchanges use dynamic price ranges that can be widened during the day. These shares can therefore move more than a fixed band would allow.
What a circuit does not mean
- A share hitting its upper circuit is not a sign that it is a good investment. It means buyers outnumber sellers at that moment, sometimes because of news, sometimes because of speculation or manipulation.
- Repeated upper circuits in a small share, especially one promoted in social media groups, can be a warning sign of a pump-and-dump scheme.
- A lower circuit does not necessarily mean the company is failing, but it does mean you may not be able to exit when you want to.
Practical tips
- Check a share's price band and trading volume before buying, especially in small companies.
- Be cautious with shares that often hit circuits; you may be unable to sell when you need to.
- Use limit orders, so you control the price you pay or receive.
- Do not act on tips that point to shares hitting circuits; that is exactly what fraudsters use to attract victims.
Frequently asked questions
Why is my buy order not executing even though I can see a price?
If the share is at its upper circuit, there may be no sellers. Your order waits in the queue and executes only if someone sells at that price.
Can a circuit limit change during the day?
Fixed price bands generally apply for the day, but exchanges can revise bands for a share, and shares with derivatives use dynamic ranges that can change during the session.
Where can I see the circuit limit for a share?
On the NSE and BSE websites, and in most trading apps on the share's market depth or details screen.
Sources
- SEBI – Index-based market-wide circuit breakers (original 2001 circular)
- NSE – exchange website (price bands and circuit limits)
- BSE – exchange website (price bands and circuit limits)
Risk disclosures on derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to ₹50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Source: SEBI study dated January 25, 2023 on "Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment", wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22.