| Circuit Price Bands are a volatility control mechanism used by India's National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to protect investors from extreme intraday price swings. The CBands indicator plots two lines: the upper band (red), representing the maximum price a stock can rise to in a session, and the lower band (green), representing the lowest price it can fall to. These limits are set as a percentage of the stock's previous closing price, with standard bands of 2%, 5%, 10%, or 20%, depending on the stock's liquidity and applicable regulatory rules. If a stock touches either limit, trading may be frozen or restricted to curb excessive volatility and manipulation. For traders, the indicator provides clear visual boundaries of how far a stock can realistically move in one day. If the circuit price band is not set for a stock by an exchange, the default circuit parameter value (in percentage) will be used. In a formulaic expression, you can refer to upper band, lower band, and band, % values using "ucir(10)", "lcir(10)", and "cirband(10)" correspondingly. For example, the "price < 0.95 * ucir(10)" expression reads that the current price is at least 5% lower than the upper circuit band. |
