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Section 1 · Module 1.7

Price Bands, Circuits & Surveillance

5 min read

Price band & circuit lab

Reference price ₹1000. Bands reject out-of-range stock orders; index moves map to market-wide circuits (educational thresholds).

Band ₹900 – ₹1100 → order accepted into matching

Open — no market-wide halt

Try it: Push the order outside the band — see why market orders fail at circuit.

Stock Price Bands

Remember: Orders outside the daily band are rejected — circuits are not buy signals.

Most NSE equities trade inside a daily price band (for example ±5%, ±10%, or ±20% around a reference price). Orders outside the band are rejected.

Bands reduce extreme single-day gaps from thin liquidity. Highly liquid names may have wider bands; some securities can be no-band under exchange rules.

Index Circuit Breakers

Market-wide circuits can halt trading when Nifty / Sensex move about 10%, 15%, or 20% from the previous close (exact procedure is set by SEBI/exchanges). Halts give time for information to digest — they are not buy/sell signals.

  • Early-session large moves may trigger longer halts.
  • After a halt, matching resumes under exchange guidelines.
  • Stock-specific freezes can still apply even when the index is open.

ASM & GSM Surveillance

Exchanges and SEBI use surveillance frameworks to flag unusual price/volume behaviour:

  • ASM (Additional Surveillance Measure): Extra margins, tighter bands, or trade-for-trade settlement stages.
  • GSM (Graded Surveillance Measure): Progressive stages for securities with persistent unusual activity.

Seeing a stock on ASM/GSM is a risk flag — liquidity and exit paths can worsen. Always check exchange notices before chasing a “hot tip.”

What Retail Traders Should Do

  • Do not market-order into a stock hitting upper/lower circuit — fills may not exist.
  • Respect BE / trade-for-trade series codes (see Market Mechanics).
  • Size smaller in low-float or surveillance names.

Knowledge check

If a stock is on a higher ASM stage, what is a reasonable educational takeaway?

Tap an answer — you get instant feedback.