What is a circuit limit?
NEPSE sets a daily price range for each share around the previous day's closing price. During the day the price cannot move above the upper limit or below the lower limit. At the time of writing, the stock-level daily limit is commonly described as 10% up or down. Check NEPSE's current rules, because limits have been revised before.
Why do they exist?
- To slow down panic selling and excited buying.
- To give investors time to react to news.
- To protect against sudden manipulation in thinly traded shares.
Index-level circuit breakers
Besides stock limits, the exchange can pause trading when the whole market index moves sharply in a day. The exact thresholds and the length of the pause have changed over time, so look them up in NEPSE's latest notices.
What it feels like in practice
- A share that hits its upper circuit may have many buyers and almost no sellers. Your buy order may not be filled.
- A share that hits its lower circuit may have many sellers and almost no buyers. It can be hard to sell.
- A big price move on one day does not mean the same move will repeat the next day.
Tips for beginners
- Do not chase a share that is already at its upper limit.
- Remember that you may not be able to sell quickly when a share is falling.
- Check the volume. Few trades behind a big move is a warning sign.
See it in the market
The top gainers and top losers pages show the biggest moves today, including shares near their limits. Practise handling them in a free practice account.
For education only. Not investment advice. Limits and halts are set by NEPSE and can change.