Finance glossary

What is Circuit limit?

The maximum percentage by which a stock or the market is allowed to rise or fall in a day before trading is restricted.

Individual stocks have price bands, commonly 2%, 5%, 10% or 20%. When a stock hits its upper or lower circuit, trading continues only within that limit. Separately, market-wide circuit breakers halt trading if the Sensex or Nifty moves 10%, 15% or 20% in a day.

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