Explained: As SEBI mulls tighter circuit limits for F&O stocks, a look at current limits for different segments

While SEBI contemplates imposing heavier limits for trading F&O shares, here’s a look at the current price bands and circuit limits for various shares.

share market
Nifty and Sensex have three circuit breaker limits, at 10%, 15% and 20%.

The price band or circuit limit of a share is the range between which the price of the stock can fluctuate within that day. The price bands of companies can range from 2% up to 20%, based on a variety of factors such as volume and liquidity of the stock. These factors also help determine the category of the stock. Here’s a look at different categories of various securities and their price bands:

Group A, B, T, and TS: These are the most actively traded securities with lower circuit limits, typically around 2% to 5%.

Group S: These are the securities in which speculative trading is high, and hence, the circuit limits are relatively higher, around 10% to 20%.

Group F: These are the fixed income and debt securities, and they usually have wider circuit limits compared to equity securities.

Circuit breaker

Once certain stocks hit their upper or lower price band, trading is halted for those specific stocks. Likewise, the NSE Nifty 50 index has circuit breaker limits of 10%, 15% and 20% respectively. Once the index’s circuit is triggered, trading is halted across the index. Based on the previous day’s closing level, the exchange computes the circuit breaker limit for the index on a daily basis. Here’s a look at Nifty 50’s circuit breaker limits:

10%Before 1:00 pm.45 Minutes
10%At or after 1:00 pm up to 2.30 pm15 Minutes
10%At or after 2.30 pmNo halt
15%Before 1 pm1 hour 45 minutes
15%At or after 1:00 pm before 2:00 pm45 Minutes
15%On or after 2:00 pmRemainder of the day
20%Any time during market hoursRemainder of the day
Circuit Breakers

F&O stocks

All shares that have additional futures and options contracts do not have any sort of fixed circuit limit, however, the limit is flexible. The exchanges have a 10% operation range, which seeks to ascertain that trading occurs between the range. However, if the price of a scrip is set to breach the limit on either end, the price band is further extended. Before the new circuit limit is imposed, the exchanges ensure the F&O stock has a trading halt for 15 minutes.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 22-05-2023 at 12:51 IST