Limit Price Protection (LPP) is a pre-trade risk control run by the exchange that rejects a limit order in the F&O segment if its price is too far from the contract's live reference price. It exists to stop erroneous or "freak" trades — orders placed far away from where the contract is actually trading — before they can execute.
LPP is enforced by the exchange, not by Rupeezy — both NSE and BSE run it. You cannot turn it off, and it applies to every broker on the exchange. It covers Futures & Options contracts in the Equity Derivatives segment.
Why does the exchange need LPP?
Derivative contracts — especially options — have a very wide Daily Price Range (DPR), so their circuit band is far looser than a normal stock's. That wide band leaves room for a single fat-finger entry or a mispriced algo order to execute far away from fair value, causing a sudden, distorted "freak" trade.
LPP adds a much tighter, live band around the contract's traded price so those aberrant limit orders are caught and rejected up front, keeping trading orderly.
How does LPP decide if my order is out of range?
The exchange maintains a reference price for each contract and allows limit orders only within an LPP range on either side of it.
- Reference price — during trading hours this is the simple average of the contract's trade prices over the last 30 seconds, refreshed every 30 seconds. Before the first trade (at market open) it is derived theoretically from the underlying and, for options, the Black-Scholes model.
- LPP range — a band above and below the reference price. NSE and BSE both run LPP, but set the band differently.
On NSE:
| Instrument | Reference price | LPP range (± either side) |
|---|---|---|
| Index futures | ₹10,000 or below | ₹200 |
| Index futures | Above ₹10,000 | 2% |
| Stock futures | ₹50 or below | ₹1.50 |
| Stock futures | Above ₹50 | 3% |
| Index & stock options | ₹50 or below | ₹20 |
| Index & stock options | Above ₹50 | 40% |
On BSE (LPP live from 16 April 2024, replacing BSE's earlier Price Reasonability Check), the band is a percentage of the reference price subject to a minimum — but BSE sets it per product and revises it by notice, so the exact figure depends on the contract. For single-stock derivatives:
| Instrument | LPP range (± either side) | Minimum |
|---|---|---|
| Stock options | 40% of reference price | ₹20 |
| Stock futures | 3% of reference price | ₹1.50 |
Index derivatives can carry different bands by product — some newer index-options contracts use a wider band (up to 80%). For the exact band on a specific contract, check the latest BSE notice.
Because the reference price keeps refreshing, the LPP range moves through the day. If the exchange keeps rejecting orders in one direction, it automatically widens — "flexes" — the range in that direction.
What happens if my order breaches the LPP limit?
The exchange rejects the order outright — it never enters the order book. This happens when:
- a Buy limit price is above the upper LPP limit, or
- a Sell limit price is below the lower LPP limit.
You'll get a rejection saying the price is outside the current LPP range. The same check runs when you modify an existing order's price (the original order stays as it was), and for Stop Loss (SL-Limit) orders it is applied at the moment the order triggers and is released into the market. To get through, re-enter the order at a price inside the band — usually much closer to the live traded price.
LPP is an additional check on top of the exchange's Operating Price Range (the DPR band), so an order has to clear both:
Example — if a contract's operating price range is ₹50–₹150 and its current LPP range is ₹80–₹120, a Buy limit order is accepted only between ₹50 and ₹120 (LPP rejects anything above ₹120), and a Sell limit order only between ₹80 and ₹150 (LPP rejects anything below ₹80). Any order below ₹50 or above ₹150 is rejected by the operating price range itself.
Which contracts and order types does LPP apply to?
LPP applies to Futures & Options contracts in the Equity Derivatives segment — index futures, stock futures, index options, and stock options. It runs on every permitted order type that carries a limit price, for both proprietary and client orders. (BSE excludes calendar-spread and option-strategy contracts from LPP.)
What changes during a cooling-off period?
When a stock's underlying triggers a cooling-off (a short volatility pause), the exchange places a temporary floor or ceiling on the LPP limits of that stock's options — but only on the "sentimental" side, i.e. the direction the underlying is moving. This caps how far the option price can run during the pause so you can still hedge or exit your position. On NSE the cap is 15% of the option's LTP or theoretical price (₹7.50 if that price is ₹50 or below), and it is lifted once the underlying's price band is flexed. This mechanism applies to stock options only.
How is LPP different from MPP and circuit limits?
- Circuit limits / DPR are the outer daily price band for a security. LPP sits inside that — a tighter, faster-moving band, so a derivative order can be within the DPR and still be rejected by LPP.
- Market Price Protection (MPP) is a Rupeezy feature you switch on for your own market orders to cap slippage; unfilled quantity rests as a limit order. LPP is the opposite in spirit: a mandatory exchange validation on limit orders that you cannot disable.
Things to keep in mind
- LPP validates the price of limit orders; a market order isn't priced by you, so it isn't checked the same way.
- Clearing the DPR does not guarantee the order clears LPP — both bands apply.
- To avoid Stop Loss rejections, don't set the SL trigger at an extreme price near the operating range, and keep the limit price close to the trigger price.
- Orders already resting in the book stay put even if the LPP band moves, and continue to match on price-time priority.
For the exchange's full rules, see NSE's Limit Price Protection FAQs.