What Is a Circuit Breaker or Price Limit on the NGX? What Happens When Trading Pauses

A price limit on the Nigerian Exchange (NGX) is the maximum a single share's price may move in one trading day, published by NGX as ten per cent above or below its reference price. A circuit breaker is a market-wide pause that NGX triggers when the All-Share Index moves sharply within a day. The two rules work at different levels, one share at a time and the whole market at once, and both exist to slow sudden moves rather than to stop prices changing. Neither protects the value of any individual holding.

The Daily Price Limit on Individual Shares

As published by NGX, each listed equity has a daily price band of ten per cent either side of its reference price, which is normally the previous day's closing price. The trading system will not accept an order priced outside the band. A share can therefore rise or fall by up to ten per cent in a session, but not further, however strong the demand or the selling. NGX also applies a minimum trade size below which a trade does not move the published price, and it has consulted on changes to its pricing methodology, so confirm the current rule with NGX or your broker.

When a share reaches its limit, trading in it does not stop. Orders at the limit price can still be matched with each other. What happens in practice is that one side of the order book empties: if the share is at its upper limit, buyers queue at the limit price and there may be few or no sellers, so many buy orders go unfilled that day. At the lower limit the reverse happens, with sellers queued and buyers scarce. The next day the reference price resets to that day's close and a fresh band applies, which is why a sharp move can continue over several sessions.

The Index Circuit Breaker

The circuit breaker works on the NGX All-Share Index rather than on any one share. Under the published rule and NGX's interpretative guidance, if the index rises or falls by five per cent from the previous day's closing value during a set window of the trading day, trading in all listed equities halts for thirty minutes. The market then reopens with a ten-minute intraday auction before continuous trading resumes. If, after reopening, the index moves a further five per cent in the same direction, NGX halts trading for the rest of the day.

• The trigger is a five per cent move in either direction, so a sharp rise pauses the market in the same way as a sharp fall.
• A halt is applied only once in a trading day. A second breach of the first threshold does not cause a second thirty-minute halt.
• The rule applies during a window that ends some time before the close. A move that happens late in the session does not trigger a halt, because there would be too little time left for an orderly reopening.
• The thresholds and the window are set by NGX and can be changed. The guidance was written when the market closed earlier than it does now, so check the current times with NGX.

What Happens to Your Orders During a Halt

NGX's guidance is specific about orders during an index halt. Orders already in the book stay there. A broker can cancel or deactivate an existing order, but cannot amend it, and no new orders can be entered until the market reopens. Trades matched before the halt are unaffected: they clear and settle through CSCS on the normal cycle, which is T+1 since 1 June 2026, as published by CSCS. When the market reopens, orders that were in the book are reactivated and continue to be matched.

If you placed an instruction through a platform rather than directly with a broker, the platform's broker holds your order and follows the same rules. Your instruction may sit in the queue through the halt and execute at the reopening auction or afterwards, or the broker may cancel it under its own procedures. Ask your broker or platform how it handles orders during a halt.

Why the Rules Exist

Exchanges use price limits and circuit breakers to give participants time to absorb news before prices move further. A pause lets brokers check their positions, lets companies issue clarifications and lets investors read the announcement that may have caused the move. NGX describes its circuit breaker as a way to allow liquidity to regroup and to dampen both upswings and downswings. These are market-stability tools; they are not a judgement on any company or a signal about where a price is heading.

How You Find Out

NGX announces a halt and a reopening on its website, through its market data feeds and through the media. Your broker or platform will usually notify clients as well. A halt is expected to be rare, and most Nigerian investors will go years without seeing one. A share sitting at its daily limit is more common, and the sign is a price list showing the share at exactly ten per cent above or below the previous close with a queue of unfilled orders on one side.

NGX Price Limits and Circuit Breakers: FAQs

Can I sell a share that has hit its lower limit?

You can place a sell order at the limit price, and it will be matched if a buyer appears at that price. Orders below the band are not accepted. Whether the order fills that day depends on whether there are buyers, which the rule does not ensure.

Does the ten per cent limit apply to every security on NGX?

The band described here applies to listed equities. Other instruments, such as exchange-traded funds and fixed-income securities, are governed by their own rules. NGX publishes the details in its rulebook and trading manual.

Does a circuit breaker cancel my order?

No. Under NGX's guidance, existing orders remain in the book during the halt and are reactivated at the reopening. Only your broker can cancel them, and only if you or the broker's own rules require it.

Is a trading halt the same as a suspension?

No. A circuit-breaker halt is market-wide, lasts a fixed period and is triggered by index movement. A suspension applies to one company's shares, is imposed by NGX for a regulatory reason such as a missed filing, and lasts until the reason is resolved.