Why was my order rejected with the reason "The price is out of the current LPP range"?
The Limit Price Protection (LPP) range was introduced as part of the exchange risk management framework. Under this, limit orders placed outside the defined LPP range for index options contacts are rejected with the reason "The price is outside the current LPP range".
- It is applicable to limit and stop loss-limit orders for index options contracts
- It is dynamic and changes with respect to movements in the contract price.
- Order will be rejected by the exchange if:
- The BUY order price is greater than the high LPP limit
- The SELL order price is less than the low LPP limit
- Therefore, it is calculated as:
| Instrument | Variation of Limit Price from LTP |
|---|---|
| Index options with a premium less than/equal to Rs. 50 | Buy orders: up to Rs. 20 above LTP Sell orders: up to Rs. 20 below LTP |
| Index options with a premium higher than Rs. 50 | Buy orders: up to 40% above LTP Sell orders: up to 40% below LTP |
For example, a BANKNIFTY options contract is trading at Rs. 80. Since the premium is higher than Rs. 50:
- Applicable price variation = 40% ; 40% of Rs. 80 = Rs. 32
- LPP range upper limit (for BUY) = 80 + 32 = Rs. 112
- LPP range lower limit (for SELL) = 80 - 32 = Rs. 48
- Hence, buy orders must be placed below Rs. 112, and sell orders above Rs. 48. If placed outside this range, the order will be rejected.
For more information, view the NSE website.
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