What is Lower Circuit?
Lower circuit halts further downside when hit — trapped longs cannot exit at market.
Formula
Lower Circuit Example: Previous Close: ₹100 Circuit Band: 10% Upper Circuit: ₹110 (+10%) Lower Circuit: ₹90 (-10%) Panic Scenario: 9:15 AM: Bad news, opens at ₹92 9:16 AM: Panic selling, hits ₹90 9:17 AM: Lower circuit hit 9:18 AM onwards: Price stuck at ₹90 Order Book at ₹90: Sell Orders: 800,000 shares (panicking) Buy Orders: 5,000 shares (bottom-fishing) You can't exit. You're trapped.
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how Lower Circuit shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Lower Circuit on NSE cash and Nifty (24,300): co-movement with global futures (SGX/GIFT) affects open print — log pre-market cue in journal.
Bank Nifty futures perspective
Lower Circuit visible in Bank Nifty depth at 55,000: banking basket drives ~40% of index move; watch HDFC/ICICI/Kotak contribution when interpreting lower circuit.
How to validate
- Validate Lower Circuit readings by session tag — open hour stats differ from midday.
- Check behaviour on gap-up/gap-down days separately on Nifty tags.
- Correlate with India VIX buckets (calm vs elevated) before changing rules.
- Confirm liquidity notes were filled on fast-market days.
How to track in TradeLyser
- Tag session phase and liquidity state on each trade influenced by Lower Circuit.
- Daily journal: one line on market structure context (gap, range, trend).
- Filter analytics by session tag during monthly review.
- Note India VIX at session open when structure rules depend on volatility.
Best practices
- Pre-define how Lower Circuit maps to session tags each quarter.
- Reduce size on expiry and event sessions when structure breaks.
- Journal gap days explicitly — averages hide gap risk.
- Align structure tags with India cash session hours (9:15–15:30).
Common pitfalls
- Applying midday rules to the opening 15 minutes without adjustment.
- Trading illiquid names with the same Lower Circuit assumptions as Nifty.
- Forgetting overnight gap risk on “intraday” tags.
- Over-tagging — so many structure labels that review becomes noise.
How to use this in TradeLyser
Note circuit band % on small caps in risk sheet.
Related terms
Exchange pauses or halts trading when price hits daily circuit filters — limits intraday range.
Liquidity describes depth and ease of entering/exiting at stable prices. Nifty top names differ sharply from illiquid small caps.
Penny stocks trade at very low prices with thin liquidity and volatile spreads — often small-cap extremes.
Upper circuit is exchange price band halting further upside when hit — often 5–20% bands.
FAQ
Average down at lower circuit?
Often cannot — plan risk before entry.
Circuit freeze duration?
Per exchange rules — know halt mechanics.
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