Circuit breakers and upper/lower locks on PSX
How PSX price bands create upper and lower locks, what a locked order book looks like, when the whole market halts, and what a lock means when you sell.
PSX limits how far a share can move in one session. Each stock has a daily price band, a percentage above and below the previous close with a minimum rupee floor for low-priced shares, and the trading system rejects orders outside it. When buyers push a stock to the top of its band and nobody will sell there, the stock is upper locked; when sellers push it to the bottom and nobody will buy, it is lower locked. Separately, an index-level circuit breaker halts the entire market for a cooling-off period when the KSE-30 index moves too far, too fast. The exact band width, the rupee floor, the index thresholds and the halt duration are set by PSX’s regulations and have changed over the years, so this post explains the mechanism and points to where the numbers in force are published.
Two mechanisms, one nickname
“Circuit breaker” gets used for both, but they are different things.
| Per-stock price band | Market-wide halt | |
|---|---|---|
| Applies to | One security at a time | Every security in the market |
| Trigger | Price reaches the top or bottom of the day’s band | The KSE-30 index moves by a set percentage and stays there for a set time |
| What happens | Orders beyond the band are rejected; trading continues inside it | Trading stops for a set period, then resumes |
| How often | Several stocks on most days | Rare; only in sharp market-wide moves |
| Where the numbers are | PSX regulations | PSX regulations |
The first is a fence; the second is a pause. A locked stock is not a halted stock, and a halted market is not a locked market.
The per-stock price band
Every trading day, the system computes each security’s permitted range from its previous close: a percentage up and a percentage down. Because a fixed percentage of a Rs 3 share is a few paisa, the rules also set a rupee floor, so that low-priced shares can move at least that amount either way even if the percentage would give less. Whichever is larger, the percentage or the floor, defines the day’s band. On an ex-date for a bonus or right issue the band is computed from the adjusted reference price rather than the raw previous close, which is why a stock can open at a very different level without ever breaching its limit; bonus shares explained covers that adjustment.
An order priced above the upper limit or below the lower limit is rejected at entry; your broker’s platform will usually show an error rather than a queued order. Inside the band, trading is normal: price-time priority, continuous matching, the same as any other day.
Different segments and situations have their own rules. Futures contracts, newly listed shares in their first sessions after an IPO, and securities under special arrangements can carry different or no limits. The ready-market band that applies to most listed shares on most days is the one this post describes, and its current width and floor are set out in PSX’s regulations, which are amended from time to time.
What an upper lock looks like in the order book
A stock that is upper locked shows a specific shape on the market-depth screen:
- The last traded price equals the day’s upper limit.
- The bid side is stacked at that limit, often with a large quantity queued, because everyone who wants to buy has bid the maximum the rules allow.
- The offer side is empty or shows only a token quantity, because anyone willing to sell at the limit has already been matched and the rest are waiting for a higher price tomorrow.
- Volume stalls. Trades happen only when a new seller arrives, and each one is absorbed instantly by the front of the buy queue.
On a quote screen the stock sits at plus the band percentage and does not move for the rest of the session. It has not been suspended; it has reached the highest price at which the rules allow a trade, and at that price there are only buyers.
What a lower lock looks like
The mirror image. The last price equals the lower limit; the offer side is stacked with sellers at that limit; the bid side is empty; and volume stalls because trades occur only when a buyer steps in, and each buyer is filled from the front of the sell queue. The stock shows minus the band percentage all day.
A lower lock on a single stock is usually a reaction to news specific to that company. A day when dozens of stocks are lower locked at once is a market-wide event, and it is the sort of day the index-level halt was designed for.
The market-wide halt
PSX’s market halt is keyed to the KSE-30 index, not the KSE-100 that the headlines quote. If the KSE-30 moves by a set percentage from its previous close, in either direction, and stays beyond that level for a set number of minutes, the exchange halts trading across the whole market for a set period. Trading then resumes, usually through a pre-open session in which orders are collected and an opening price is discovered before continuous matching restarts, and the regulations provide for what happens if the index moves again after the resumption.
The percentage thresholds, the minutes and the halt length are exactly the sort of figures that have been revised several times, so they are not repeated here. The current values are in PSX’s regulations and in the exchange’s notices when they change. What is stable is the design: a halt is a pause to let information circulate and orders be reconsidered, not a suspension of the market for the day.
While the halt is on, nothing trades: not the stocks that were locked, not the ones that were calm. Whether open orders survive the halt or are cancelled on resumption is a detail worth confirming with your broker in advance rather than during one.
The markets page shows the KSE-100 and the other PSX indices with their day’s change, alongside the top gainers, losers and volume leaders; on a lock-heavy day, the gainers and losers tables are where the locks pile up, at plus or minus exactly the band. The KSE-100 hub tracks the headline index over longer windows, and what the KSE-100 measures explains why the headline number and the halt trigger are different indices.
What a lock means if you are trying to sell
This is the practical question, and it has a plain answer.
In a lower lock, you can still place a sell order, but only at the lower limit or above, and it joins the queue behind every seller who got there before you. It fills only if buyers appear, and on a day when the stock is pinned at the floor, they may not. If your order is unfilled at the close, it lapses or carries forward according to its validity setting. The next day’s band is computed from the locked close, so the stock can fall by another full band before it locks again. A stock can lower lock on several consecutive days, and each day the queue re-forms.
Three mechanical facts matter here. First, the queue is price-time ordered: at the same price, the earlier order fills first, so time of entry matters on a lock day. Second, the lock does not stop you from selling above the limit; it stops anyone from buying below it, which on a lower-lock day amounts to the same thing. Third, a lock is a statement about willingness to trade at the permitted price, not a statement about the company; the band will be wider in rupees tomorrow if the price is higher, and narrower if it is lower.
In an upper lock, a seller is in the opposite position: there is a queue of buyers at the limit, so a sell order at the limit fills immediately against the front of that queue. The constraint on an upper-lock day belongs to buyers, who cannot pay more than the limit and may not be filled at all.
None of this says whether a locked stock is a good or bad thing to hold; that depends on why it locked, and the exchange’s rules are indifferent to the reason. Locks on thinly traded shares can come from very small quantities, and both PSX’s surveillance function and SECP watch for patterns that suggest a price is being pushed rather than discovered.
Where to read the actual numbers
The band width, the rupee floor, the index thresholds and the halt durations are in PSX’s regulations, published on psx.com.pk, and changes are announced through exchange notices that brokers circulate. If a figure in an article, including this one, disagrees with the regulation, the regulation is right. The per-symbol pages in Equivest’s stocks directory show each company’s price, day change and a one-year price chart, which is enough to see when a stock is sitting at the edge of its band; the band itself is the exchange’s to set.
A lock is a fence at the edge of the day’s permitted range. A halt is the whole market taking a breath. Knowing which one you are looking at is most of what a first-time investor needs.
Education, not investment advice.