Circuit limits

Price limits that halt or restrict trading after a large move, applied both to individual securities and to the market as a whole.

Individual stocks carry bands depending on the security, and those with derivatives have a flexing dynamic band. Market-wide circuit breakers halt everything: India triggers at index moves of 10%, 15% and 20%, while the American market uses 7%, 13% and 20% on its main index.

The effect on a shareholder is practical. A stock locked at the lower circuit cannot be sold at any price, which is exactly when a holder most wants to.

Small-float companies hit these limits often.