Price Band
The maximum percentage a security may move from its previous close in a session before orders outside the range are rejected.
Formula
Upper Band = Previous Close x (1 + Band %); Lower Band = Previous Close x (1 - Band %)
Unit
%
In depth
Price bands are set per security — 2%, 5%, 10% or 20% — and are tightened for stocks under surveillance and widened or removed for those with liquid derivatives. Orders priced outside the band are simply rejected, which means a genuine repricing after major news may take several sessions of locked moves to complete. Bands limit the visible move, not the underlying change in value, and a stock locked at the lower band is untradable rather than merely cheap. Confusing a price band with a market-wide circuit breaker is common: one is per-security, the other halts the whole market.
Worked example
Previous close ₹400 with a 10% band gives a range of ₹360 to ₹440. If fair value falls to ₹300 on news, the stock can only reach ₹360 today, ₹324 tomorrow and ₹300 the day after — three sessions to travel where the value went instantly.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Price Band” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.