MCX option circuit limits are not based on demand, order book depth, or whether trades are happening. They are set using a theoretical pricing model where the exchange stress-tests the option under extreme underlying moves and volatility shocks. The lowest and highest theoretical values under those stress scenarios become the lower and upper circuits.
In the March 140000 PE case, because there is still time to expiry, the exchange assumes that under a sharp fall in gold or a volatility spike the option value can expand significantly. That’s why the range looks wide. If market participants believe fair value is below the lower band, they simply don’t place bids which is why the bid side appears empty. The exchange does not shrink circuits based on pending orders, as that would create manipulation and risk-management issues.
There was a similar discussion earlier on TradingQnA as well:
So this is not a bug. It’s how MCX’s model-based risk framework is designed.