Circuit limits of F&O stocks for overnight position

How much lower/upper can a f&o stock open the next day, i want to know for risk management perspective as to how much i can lose in the worst case scenario? Is the limit 10%, 20% or what.

2 parts

  1. There is no theoretical worst case you can rely on. If the underlying stock changes by a huge percent, the near ATM could gap more than the values you mentioned. I have seen the index options jump 100 to 150% overnight. Stock options will be more volatile than that

  2. NSE assigns upper circuit and lower circuit for each strike. And if they dont revise those limits according to pre-open value, then that particular strike will have only buyers/sellers depending on the situation. This strike will not trade till the circuit limits are altered.

Basing your calculations on underlying will give you more risk management control (for positional trading)

I was talking about futures actually.

futures will mirror the spot

Yes i know that, what i wanted to know is like index has 10% limit as in it won’t open more than 10% the next day, does the stocks have that kind of circuit limit for next day as well.

Index has a market wide freeze period during intraday for 10,15&20% and trading is halted till next day at 15-20%.

F&O stocks don’t have these limits, instead they have price bands of 10%. When breached, there is a cooling period of 15mins and trading starts again. Under each script, it’s listed as upper and lower circuit.

So f&o stock can open at any price even 30% above the previous day close?

For future contracts, it will open max up to 10% up or down. After that there will be a freeze period of 15 min then again it will be relaxed in the steps of 5%.

Understood. Thankyou😃

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