Circuit Limits & Surveillance

Maya, who runs a burger restaurant and is learning to invest, opens her watchlist after the lunch rush on Thursday 15 October 2026. One share has shown the same price all day, ₹878.45, with a red "lower circuit" tag, and the buy side of its order screen is empty. She added it weeks ago, after reading that its price had risen more than ten times since January.

A price band is the range of prices an exchange accepts for one share today. Its top is the upper circuit and its bottom the lower circuit (apps also say "circuit limit"). A share "hits" a circuit when it trades at that edge, and it is locked when every trade of the day happens there, as Sterlite's did on 15 October: 12047 trades, all at ₹878.45. Trading carries on; only the price is held. Chapters 2 to 5 follow it.

A surveillance list tightens the rules for selected shares, such as full payment up front or every trade settled by delivery; trading goes on, on the new terms. Sterlite's page on BSE, India's other large exchange, carried one on 28 October 2026: "ASM LT : Stage 4". Chapter 6 reads it.

The market-wide circuit breaker is the one "circuit" that stops the whole market: a big enough move, 10% or more, in the Nifty 50 or the Sensex, India's two best-known share indices: show the note on Index, stops trading in every share and equity derivative in the country for a set time. It happened on 13 March 2020. Chapter 7 follows that day.

A suspension stops trading in one share by an exchange order that gives its reason. Under the rules of SEBI, India's market regulator, one reason is a company not filing its results for two quarters in a row. It is rare and it is not a price rule; this lesson needs it only to tell it apart.

So trading in Maya's share never stopped. The price could not go lower that day, and the buyers were few.

On Wednesday 14 October 2026, Sterlite closed at ₹924.65 on NSE. Its band was 5%. Five per cent of ₹924.65 is about ₹46.23, so on Thursday NSE accepted orders from ₹878.45 to ₹970.85: ₹924.65 × 0.95 = ₹878.4175, rounded up to ₹878.45, and ₹924.65 × 1.05 = ₹970.8825, rounded down to ₹970.85. The bottom is the lower circuit and the top the upper circuit. Prices move in steps called ticks: show the note on Tick, 5 paise for shares priced ₹250 to ₹1000 on NSE, and the limits are rounded inward to a whole step.

It starts again every day. After Sterlite closed at ₹878.45, Friday's limits were ₹834.55 to ₹922.35, and Friday's lowest trade was exactly ₹834.55, the new floor. That is the band's whole job: it limits how far a price can move in one day, not how far it can move in all, which is how a share can hit its lower circuit day after day (chapter 4). Each exchange works from its own close: that Thursday, Sterlite's lower circuit was ₹878.45 on NSE and ₹880.50 on BSE.

Who gets which band. About six in ten securities on NSE have a 20% band (2206 of 3592 on 28 October 2026). TMCV, Tata Motors' commercial-vehicle company, is one: on Monday 26 October 2026 its band ran from ₹316.80 to ₹475.20 around Friday's close of ₹396.00. The rest have 10%, 5% or 2%, or "No Band". The exchange sets each band and changes it: after eMudhra, which issues digital signature certificates, closed at its lower circuit on 21 and 22 October 2026, NSE cut its band from 20% to 10% from 23 October. Surveillance lists narrow bands too (chapter 6).

Shares with futures and options. "No Band" mostly marks shares that also trade as futures and options, contracts on the share's price (Types of Investments), plus exchange-traded funds. Instead of a fixed band, NSE starts each day with a range 10% either side of the previous close (it calls this the operating range) and widens it when trading keeps pressing on an edge, by 5% at first, after a 15-minute pause. Lodha Developers is one: on Wednesday 28 October 2026 its starting range ran from about ₹909 to about ₹1111 around its previous close of ₹1010.40. So these shares can move much further in one day: chapter 4 has one that fell 28% in a session.

Elsewhere, single shares have bands too. In the US they are called Limit Up-Limit Down: if a share's price stays at its band for 15 seconds, trading in that share pauses for five minutes, and the band follows the price through the day. And a new share has no previous close on its listing day, so its first price comes from a special opening auction (IPOs Explained).

On a locked lower-circuit day, the market depth: show the note on Market depth on a broker's app (the waiting orders at each price; How to Read a Stock Quote reads it) shows sellers stacked at one price and nothing on the buy side: "Total buy quantity 0". There are two reasons. A buy order at ₹878.45 meets waiting sellers and trades the moment it arrives, so it never rests on the screen; a buy order below ₹878.45 is rejected, because it is outside the band.

Sellers cannot offer less, so they all wait at ₹878.45 in the order they arrived: price first, then time (How a Stock Exchange Works). Each buyer who turns up is matched with the seller at the front of the line.

Walk through it (an illustration: the queue sizes are made up, the price and the day are real). At 9:15 am Sterlite opens at ₹878.45, its lower circuit; say 5 lakh shares are already waiting to be sold there. A buyer arrives for 500 shares: the trade happens at once, at ₹878.45, with the first sellers in line, and the queue is 500 shorter. All day new sellers join at the back; when they come faster than buyers, the line grows. At 3:30 pm, the close, anyone still in line has not sold, and tomorrow starts from a new, lower floor.

The real day. On 15 October 2026 buyers took 1650495 shares in 12047 trades, every one at ₹878.45: about ₹145 crore, about 137 shares a trade. So the sellers, between them, sold exactly that many and no more, first in line first; whoever was still behind them at 3:30 pm did not sell that day. How long the line was is not published.

So, could anyone get out? Yes: as many as the buyers took, in the order the sellers queued. Nobody could sell more than buyers wanted, and nobody could jump the line by offering less. Each exchange keeps its own queue: on BSE that day, all 740 of Sterlite's trades were at ₹880.50, its own lower circuit there.

The mirror. At the upper circuit the line forms on the buy side. On Wednesday 30 September 2026, every Sterlite trade on NSE was at ₹909.90, its upper circuit, 9224 trades in all: holders who wanted to sell were matched at once, and buyers waited. A share that keeps closing at its upper circuit can look as if it only rises; this one was locked at its lower circuit a fortnight later.

The first lesson ended on a promise: the market offers a place to sell, never a price. A lower circuit shows the edge of that promise. The place stays open and the lowest price is fixed, but a sale still needs a buyer.

On 24 January 2023, Hindenburg Research, a US firm that bets on falling prices (a short seller: show the note on Short seller), published a report on the Adani group, and the group rejected it in statements filed with the exchanges. This lesson takes no side; it follows the prices.

Two days, multiplied. Adani Total Gas, the group's company that supplies piped gas and CNG, closed at its lower circuit on Friday 27 January 2023, from ₹3660.00 to ₹2928.00, and again on Monday 30 January, to ₹2342.40. Two falls of 20% took 36% off, not 40%: the second 20% was taken from a lower price (0.8 × 0.8 = 0.64).

The run. It closed at its lower circuit on every one of the 23 trading days from 27 January to Tuesday 28 February 2023. NSE cut its band from 20% to 10% from 31 January and to 5% from 3 February, so each step got smaller and there were more of them: two days at −20%, three at −10%, eighteen at −5%. From ₹3891.75 on 24 January to ₹678.55 on 28 February, the price fell 82.6%.

Who got out. On 16 of those 23 days, every trade happened at one price. On Thursday 2 February, 64276 shares changed hands, about 11% of the 564577 that traded on 23 January, before the report. On a few days buyers came in numbers: on 16 February, 5922981 shares traded as the price touched its upper circuit and fell back to close at its lower one. The run ended on 1 March, with a rise of 4.88%.

The contrast: Adani Enterprises, another group company, had futures and options, so it had no fixed band. It fell 28.20% on 1 February and 26.70% on 2 February, and on 3 February touched ₹1017.45, 35% below the previous close, before closing 1.38% higher. Without a band the fall came in hours, with buyers at every price; with a band it came in steps over weeks, and on most days few could sell. Neither protected the money of the people who held.

A circuit limit slows a fall into steps; it does not stop it, and on the worst days it can keep you from selling. Risk Management 101 shows how to size a holding so that a run like this would hurt without wrecking the plan.

Try any band and any number of days (an illustration): say Maya had ₹10000 in a share that closed at its lower circuit three days running. With a 20% band, ₹5120.00 would be left; with 10%, ₹7290.00; with 5%, ₹8573.75; with 2%, ₹9411.92.

A stop-loss is an order that waits until the price reaches its trigger: show the note on Trigger price, then becomes a live sell order: either with a limit price (a stop-limit: the least you will accept) or as a market order (a stop-market: the best price available). Placing Your First Order has the mechanics.

Maya's what-if, on real prices (an illustration): say she had bought 10 Sterlite shares at Wednesday's close, ₹924.65, for ₹9246.50, and set a stop-loss with its trigger at ₹900.00, planning to lose no more than about ₹246.50. On Thursday the first trade was at ₹878.45, below the trigger, so the stop triggered at the open.

A stop-limit with its limit at ₹895.00 may sell only at ₹895.00 or higher. Every trade that day was at ₹878.45, so it never filled. Triggered: yes. Sold: no.

A stop-market became a sell at the best price available, which that day could only be ₹878.45, and it joined the line behind every seller who came before. It filled only if the day's buyers reached it before the close. Had it filled, the loss would have been ₹462.00, nearly twice the plan.

A stop acts when you are not watching; that is its use. It cannot create a buyer, move you up the line, sell below the lower circuit or promise its trigger price. On a locked day it is one more seller in the queue.

The same kind of jump can fill a stop far below its trigger on an ordinary day too; Risk Management 101 shows how to plan for it.

NSE and BSE, with SEBI, keep lists of shares that need extra care, to alert investors to be careful with them. Shares are added by set tests, not by anyone's opinion, and NSE says being listed "should not be construed as an adverse action" against the company.

Two main lists. ASM, the Additional Surveillance Measure, looks at how a share trades: how far and how fast its price moves, how much of the buying comes from a few clients, sudden jumps in volume, and similar tests. GSM, the Graded Surveillance Measure, is for shares whose price, in NSE's words, is "not commensurate with" the company's financial health. Exchanges keep other lists too, such as one for small companies (ESM); the tag names the list and the stage.

What a stage changes, from mild to strict. Full payment up front instead of a part, like a supplier who stops giving Maya credit and asks for the full bill on delivery (Margin, Leverage & Pledging). A narrower band. Trade-for-trade: show the note on Trade-for-trade settlement, where every trade is settled by delivery, so a buy and a sale on the same day are not netted and you cannot trade in and out within the day; NSE shows such shares in series BE, BSE in group T. An extra cash deposit from buyers, held for about a month. And at GSM's last stages, trading once a week, on Monday or the week's first trading day, with no rise in price allowed at the very last. The ladder in the figure shows which stage adds what.

Reading a real tag. On 28 October 2026, Sterlite's page on BSE showed "ASM LT : Stage 4", "Price Band 5%" and "Group / Settlement Type T / T+1". Decoded: the long-term list's last stage, which means full payment up front, a 5% band and trade-for-trade settlement (group T); "T+1" says each trade settles on the next trading day (Clearing & T+1 Settlement). That 5% is the band Sterlite had through the whole month this lesson has followed. Its price had risen more than ten times since January, from ₹84.60 on 27 January to ₹1051.10 on 6 October; ASM's tests look at moves like that, among others, and the exchange does not publish which test a share met.

Who was on the lists on 28 October 2026. NSE's long-term ASM list named 140 shares: 126 rows at Stage I and 12 at Stage IV, Sterlite and HFCL among them. eMudhra was on the short-term list at Stage I after its two lower-circuit days, and so was PB Fintech, which runs Policybazaar and whose shares have futures and options: the lists are not only for small companies. The GSM list had 77 rows, most of them shortlisted with no action yet.

What to do with a tag. Read the list and the stage, then ask what it changes for you: will you pay in full? Can you sell what you buy today? Is there a deposit? Does it trade every day? Lists are reviewed often, long-term ASM every week and GSM every quarter, so check on the day. A tag is a caution, not a verdict, and a share with no tag has not been cleared by anyone.

India's market-wide circuit breakers watch the Nifty 50 and the Sensex (Market Indices). If either moves 10%, 15% or 20% from the previous day's close, up or down, trading stops in every share and equity derivative on every Indian exchange. How long depends on the size of the move and the hour: a 10% move stops trading for 45 minutes before 1:00 pm, for 15 minutes from 1:00 to 2:30 pm, and not at all after that; a 15% move stops it for 1 hour 45 minutes before 1:00 pm, for 45 minutes from 1:00 to 2:00 pm, and for the rest of the day after that; a 20% move ends the day at any hour. After a halt that ends, trading restarts with a 15-minute pre-open call auction: show the note on Pre-open call auction: orders are collected and one opening price is found (Stock Market Timings & Auctions).

Friday 13 March 2020. In the Covid-19 sell-off, the Nifty 50 opened 5% lower and fell 10% below the previous close of 9590.15 within minutes. At about 9:20 am, trading stopped across India. A 15-minute auction began at 10:05 am, normal trading restarted at 10:20 am, and the Nifty 50 then climbed to close at 9955.20, 3.81% higher than the day before. From its lowest point to its highest, the day spanned about 16.7% of the previous close.

Monday 23 March 2020. Ten days later the Sensex fell 10% in the first hour, and trading stopped for 45 minutes again. This time there was no rebound: the Nifty 50 kept falling after the restart, to 13.3% below the previous close at its lowest, and closed 12.98% down, at 7610.25.

Same rule, opposite endings. A breaker gives everyone time and restarts trading with an auction; it does not decide which way prices go next.

How far the gates are. The levels are worked out each day from the last close. For Thursday 29 October 2026, NSE published 2269.90 points as the 10% level on the Nifty 50's close of 22698.85: gates at 20428.95 and 24968.75. Even on Tuesday 4 June 2024, when the Nifty 50 closed 5.93% lower, its lowest point that day was 8.5% below the previous close: still inside its 10% gate.

Elsewhere. In the US the breakers use the S&P 500: a fall of 7% or 13% before 3:25 pm, Eastern time, halts trading for 15 minutes, and a 20% fall ends the day. The 7% level tripped four times in March 2020: on 9, 12, 16 and 18 March.

Everything in this lesson comes down to one plan: assume that one day the other side will not come, and buy only what you could hold through that day. Five checks come before you buy any share, and the quote page answers four of them.

First, what is its band, and where are today's limits? Chapter 2; the page shows "Price Band", "Upper Price Band" and "Lower Price Band". Second, is it at a limit now, and is anyone on the other side? Chapter 3; the market depth shows it, and an empty side means a queue.

Third, how much of it trades on a normal day, against the quantity you want? Chapter 3 and How to Read a Stock Quote; BSE shows the day's traded quantity and the two-week average ("TTQ: show the note on TTQ", "2W Avg Qty"). Fourth, does it carry a surveillance tag, and what does the stage change for you? Chapter 6; the tag sits under the price, beside the settlement group.

Fifth, if it closed at its lower circuit for a week, could you leave this money where it is, without counting on a stop-loss? Chapters 4 and 5. No field answers this one: if the answer is no, the holding is too big (Risk Management 101). The market-wide breaker needs no check: it pauses everyone, and chapter 7's clock says for how long.

Sterlite's answers on 28 October 2026: a 5% band, with the next day's limits ₹834.75 to ₹922.55 on BSE; at the close, not at a limit; 1.18 lakh shares traded that day on BSE against a two-week average of 1.71 lakh there (each exchange counts its own: on NSE, 14.32 lakh shares traded that day); "ASM LT : Stage 4", group T. Lodha Developers, the same day: "No Band", a starting range of about 10% either side of the previous close, series EQ.

Maya copies the five checks into the notebook she keeps beside the restaurant's order book, and runs them on every share on her watchlist. The checks tell her how a share's rules could hold her money on a bad day; none of them says whether the business behind it is worth owning. That needs a different kind of reading.