Limit Price Protection (LPP) – How Navia Keeps Your Trades Safe
Have you ever mistyped an order — say you meant to buy a option contract at ₹40, but accidentally typed ₹400? Or maybe someone tries to place an order way outside the market range to manipulate prices.
Without safeguards, such trades could cause huge losses and distort market fairness.
That’s where Navia’s Limit Price Protection (LPP) steps in — protecting your trades, your money, and market integrity.
What is LPP?
LPP is a pre-trade safety filter that ensures all limit orders in Futures & Options (F&O) stay within a safe, exchange-defined range.
It automatically blocks:
🔸 Buy orders placed far above or below fair value.
🔸 Sell orders placed way off from market prices.
This means you cannot:
🔸 Overpay by buying too high.
🔸 Exploit or mistakenly bid too low.
🔸 Manipulate the market by selling too high.
🔸 Undercut the market unrealistically by selling too low.
How LPP Works?
Reference Price Set
➔ At market open → based on underlying price, interest rates & option pricing models.
➔ During the day → based on the average traded price of the last 30 seconds.
Safe Range Applied (Exchange Rules)
| Instrument | Reference Price | LPP Range |
|---|---|---|
| Index Futures (FUTIDX) | ≤ ₹10,000 | ± ₹200 |
| > ₹10,000 | ± 2% | |
| Stock Futures (FUTSTK) | ≤ ₹50 | ± ₹1.5 |
| > ₹50 | ± 3% | |
| Index & Stock Options (OPTIDX / OPTSTK) | ≤ ₹50 | ± ₹20 |
| > ₹50 | ± 40% |
Order Validation in Action
➔ If your order price is within the LPP range → ✅ Accepted.
➔ If it’s outside the LPP range → ❌ Rejected instantly.
Example 1: Stock Futures Contract at ₹100
➱ Reference Price: ₹100
➱ LPP Band (±3%): ₹97 – ₹103
| Scenario | Order Price | Outcome |
|---|---|---|
| Buy Too High | ₹110 | ❌ Rejected |
| Buy Too Low | ₹90 | ❌ Rejected |
| Sell Too Low | ₹95 | ❌ Rejected |
| Sell Too High | ₹105 | ❌ Rejected |
| Valid Buy | ₹102 | ✅ Accepted |
| Valid Sell | ₹98 | ✅ Accepted |
Example 2: Option Contract at ₹40
➱ Reference Price: ₹40 (≤ ₹50 → ±₹20 rule)
➱ LPP Band: ₹20 – ₹60
| Scenario | Order Price | Outcome |
|---|---|---|
| Buy Too High | ₹70 | ❌ Rejected |
| Buy Too Low | ₹10 | ❌ Rejected |
| Valid Buy | ₹45 | ✅ Accepted |
| Valid Sell | ₹55 | ✅ Accepted |
Example 3: NIFTY Index Futures at ₹25,000
➱ Reference Price: ₹25,000 (> ₹10,000 → ±2%)
➱ LPP Band: ₹24,500 – ₹25,500
| Scenario | Order Price | Outcome |
|---|---|---|
| Buy Too High | ₹26,000 | ❌ Rejected |
| Buy Too Low | ₹24,000 | ❌ Rejected |
| Sell Too Low | ₹24,400 | ❌ Rejected |
| Sell Too High | ₹25,700 | ❌ Rejected |
| Valid Buy | ₹25,200 | ✅ Accepted |
| Valid Sell | ₹24,900 | ✅ Accepted |
Navia Advantage
While LPP is mandatory on NSE & BSE equity derivatives, Navia also applies it on MCX — keeping your trades safe across all segments.
📌 Rule of Thumb:
Think of LPP as a safety guardrail — your order must stay within a % band or value band (set by the exchange) around the reference price. If it’s outside, the system Rejects it before it can cause losses or disrupt the market.
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DISCLAIMER: Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Full disclaimer: https://bit.ly/naviadisclaimer.
