Price bands and circuit filters

A price band caps how far a stock's price may move in one session relative to its previous close. When the price touches the band and no orders remain to meet it, trading in that stock can pause for the rest of the day. The band does not prevent the price from reaching the limit — it defines the limit, and it forces the market to stop there instead of discovering how much further panic or euphoria would have gone.

The band is a property of the stock, assigned by the exchange and revised from time to time. A stock can have its band widened, narrowed, or removed entirely, and the same stock can move between band levels over its life. Bands also interact with other exchange decisions — a stock moved to a trade-to-trade segment keeps its band but trades under additional delivery constraints.

An order whose price lies outside the band is rejected, because the exchange will not accept an instruction to trade at a price that cannot occur. A stop-loss placed outside the band cannot trigger at its stated price — it either never arms or, if the gap jumps over it, fills where the market actually is. The band is part of the terrain an order must be placed inside; orders that ignore the terrain are the ones that get refused.

When a stock closes at its band, the market is saying the session ended with the imbalance unresolved. The next session opens with a fresh band computed from the new close, and the unresolved question gets its next attempt. The machinery is periodic on purpose: every day has a defined end, and every end forces a fresh start.