Why was my order rejected with the reason "The price is out of the current LPP range"?
Exchange have introduced the mechanism of "Limit Price Protection" (LPP) in the Futures and Options segment It helps reinforce risk controls before trades, preventing unusual orders and maintaining smooth trading. The LPP range adjusts dynamically throughout the day in response to market changes.
- It is applicable to limit and stop loss-limit orders in stock and index F&O 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:
a) For Index & Stock Option
| Instrument | Variation of Limit Price from LTP |
|---|---|
| Index/ Stock 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/ Stock 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.
b) For Index & Stocks Future
| Instrument | Reference Price (Rs.) | % of Reference | Minimum Absolute Range (Rs.) |
| FUTIDX | <=10,000 | - | 200 |
| >10,000 | 2% | - | |
| FUTSTK | <=50 | - | 1.5 |
| >50 | 3% | - |
Example 1: Index Future
1. Reference Price less than or equal to 10,000
- Here, let's take reference price as Rs.8000
- And Minimum Absolute Range as Rs.200.
Therefore, for reference price of Rs.8000, the minimum absolute range is Rs.200.
2. Reference Price more than 10,000
- Consider reference price Rs.15,000
- Minimum absolute range 2% of the reference price
Minimum absolute range = 0.02 *15000 = 300
Thus, for a reference price of Rs.15,000, the minimum absolute range is Rs.300
Example 2: Stock Future
1. Reference price less than or equal to 50
- Consider Reference price as Rs. 40
- And the minimum absolute range as Rs.1.5
Thus, for a reference price of Rs.40, the minimum absolute range Rs 1.5
2. Reference Price more than 50
- Let's take reference price as Rs. 200
- And minimum absolute range as 3% of the reference price
Minimum absolute range = 0.03*200 = 6
Therefore, for the reference price of Rs.200, the minimum absolute range is Rs. 6
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