Learn about ASM - GSM surveillance lists — Stock-Market notes

What Are ASM and GSM?

Why Two Systems?

NSE uses ASM, BSE uses GSM. Same philosophy, slightly different names and stage counts. A stock can be on both exchanges' lists simultaneously if traded on both.

How Stocks Enter These Lists

Formula Entry Criteria (Derived from SEBI/Exchange Circulars)

Step 1: Exchange surveillance algorithms monitor these metrics daily: $\text{Price Volatility} = \frac{|\text{Close}_t - \text{Close}_{t-1}|}{\text{Close}_{t-1}} \times 100$ Why this formula? Percentage change normalizes price moves across stocks. A ₹10 move matters more for a ₹50 stock than a ₹1000 stock.

The entry check uses cumulative price movement (the SUM of moves over a look-back window), not a single day.

Step 2: Calculate concentration on the top 20 clients: $\text{Client Concentration} = \frac{\sum_{i=1}^{20} \text{Volume}_{\text{top 20 clients}}}{\text{Total Volume}}$

Why top 20? If more than 25% of volume comes from just 20 entities, the stock is being driven by a small group, not genuinely traded.

Step 3: Check fundamentals red flags:

Market cap to free float ratio > critical threshold
Promoter pledge > 25% (normal category); > 15% for group category
No recent financial disclosures Trigger condition (normal category securities):

\text{Cumulative 5-day price move} > 15\% \\ \text{OR Top-20 Client Concentration} > 25\% \\ \text{OR Promoter pledge} > 25\% \end{cases} \implies \text{ASM Entry}$$

The Stage Progression

Formula How Stages Escalate

Stage Migration Logic: $\text{New Stage} = \text{Current Stage} +1 \quad \text{if suspicious activity continues for } n \text{ sessions}$ Where $n$ varies by stage and exchange policy (typically a few sessions per stage review).

Restrictions by stage (NSE ASM):

Stage	Price Band	Intraday	Settlement	Additional Margin
1	±5%	❌ No (T2T)	T+2	0%
2	±5%	❌ No (T2T)	T+2	0%
3	±3%	❌ No (T2T)	T+2	0%
4	±3%	❌ No (T2T)	T+2	25%
5	±2%	❌ No (T2T)	T+2	50%
6	±1%	❌ No (T2T)	T+2	100%

Note: T2T (no intraday) applies from Stage 1, not just higher stages.

Why tighter bands? Each stage restricts maximum daily movement. At Stage 6, stock can only move ±1% per day—kills pump-and-dump schemes that need big swings.

Why margin increases? Forces speculators to lock more capital, reducing leverage-driven manipulation.

How Stocks Exit

Formula Exit Criteria

Exit is staged and gradual: a stock steps DOWN one stage at a time (Stage 6 → 5 → ... → 1 → removed) once it shows normal behavior for the required review window. $\text{Stage} \to \text{Stage} - 1 \quad \text{if criteria met for the stage-specific review period}$

Important: The exit review period is not a single fixed 20-session rule. It varies by stage—typically in the range of 3 to 10 trading sessions per stage—and depends on price stability, reduced concentration, and no fresh governance issues over that window. Each stage has its own downgrade condition per the exchange circular.

Why staged? Ensures the pattern change is genuine at each level, not a temporary pause in manipulation.

Trading Implications

Common mistake "I'll Trade It Anyway with Delivery"

Wrong thinking: "I'll just take delivery; margin doesn't matter to me."

Why this feels right: You're following the rules (delivery-based).

Hidden trap:

Liquidity dries up: Few buyers when you want to exit. You might get stuck.
Price bands tighten: Stock in Stage 6 can only move 1%/day. If you need to exit and it's falling, you'll take many days to exit at bad prices.
Further action risk: Stock can stay in T2T for a long time or even face suspension.

$\text{Expected exit time} = \frac{\text{Price distance to exit}}{\text{Daily circuit limit}}$

If you bought at ₹100, want to exit at ₹80 (20% loss), and stock is Stage 6 (±1% daily): $\text{Minimum days} = \frac{20\%}{1\%} = 20 \text{ trading days} \approx 1 \text{ month}$

Why this matters: Your capital is locked for a month even if you accept the loss!

Finding ASM/GSM Lists

Worked example How to Check Daily

NSE ASM List:

Visit: nseindia.com → Market Data → Securities in ASM
Excel download available with current stage for each stock
Updated daily before market open

BSE GSM List:

Visit: bseindia.com → Markets → Equity GSM List
Shows stage (I–IV) and date of entry

Before buying ANY stock:

Check NSE ASM + BSE GSM lists
If stock appears → Stop and research why
If Stage 4+ (ASM) or GSM III/IV: Almost certainly avoid

Figure — Learn about ASM - GSM surveillance lists

Recall Explain to a 12-Year-Old

Imagine your school keeps a "Problem Student List." Students get on it for fighting, bunking, or cheating. The school doesn't expel them, but puts restrictions: must report to principal daily, can't leave class without permission, parents notified.

ASM/GSM lists are the stock market's "Problem Stock List." Stocks get on it for weird price jumps, suspicious trading, or bad company behavior. SEBI doesn't ban them, but adds rules: no quick buying-selling (you must take delivery—like "must stay in class"), need extra money to trade (like "parents must come"), and price can't swing wildly (like "behavior contract").

The main point: Just like you'd be careful making friends with problem-list students (they might get you in trouble!), investors should be super careful with ASM/GSM stocks. They're flagged for a reason!

Connections

6.7.8-CircuitBreakers-and-Price-Bands - ASM/GSM use tighter circuit limits as penalty
6.7.10-T+2-Settlement-Cycle - ASM/GSM enforce T2T delivery with no intraday exit
6.7.13-F&O-Ban-List - Similar surveillance, but for derivatives; different criteria
4.3.5-Promoter-Pledging - High promoter pledge (>25%) is an ASM entry trigger
8.2.4-Stock-Manipulation-Schemes - ASM/GSM target pump-and-dump and operator-driven stocks
3.6.7-Liquidity-Risk - ASM/GSM stocks often have severe liquidity problems

#flashcards/stock-market

What does ASM stand for and which exchange uses it?

Additional Surveillance Measure, used by NSE. It's a graded framework (Stages 1-6) to monitor stocks with abnormal price/volume behavior.

What does GSM stand for and how many stages does it have?

Graded Surveillance Measure, used by BSE. It currently has four graded stages (Stage I–IV), not eight.

From which ASM stage does trade-to-trade (T2T, no intraday) apply?

From Stage 1 onwards. ALL ASM stages (1–6) are delivery-only; you cannot square off intraday even at Stage 1.

What additional margin is required at ASM Stage 4?

25% additional margin on top of the stock price. (Stage 5 = 50%, Stage 6 = 100%)

What is the cumulative 5-day price movement threshold for ASM entry (normal category)?

More than 15% cumulative movement over 5 days (sum of moves), not a mean.

What is the correct ASM price band per stage?

Stages 1-2 = ±5%, Stages 3-4 = ±3%, Stage 5 = ±2%, Stage 6 = ±1%.

On how many clients is ASM concentration measured, and what is the trigger threshold?

Top 20 clients; trigger when their share of volume exceeds 25% for normal category securities.

What promoter pledge level triggers ASM surveillance?

More than 25% for normal category (and more than 15% for group category securities).

How does a stock exit ASM/GSM?

Gradually, one stage down at a time, after meeting stage-specific review criteria (typically 3–10 sessions per stage), not a single fixed 20-session rule.

If a stock in ASM Stage 6 needs to fall 20% for you to exit at your target, minimum how many days will it take?

20 trading days. Stage 6 allows only ±1% daily movement, so 20% / 1% = 20 days minimum.

Concept Map

Hinglish (regional understanding)

Intuition Hinglish mein samjho

Hinglish (regional understanding)

Intuition Hinglish mein samjho

Dekho beta, yeh ASM aur GSM lists samajhna bahut zaroori hai. Simple si baat hai—SEBI aur exchanges (NSE ka ASM, BSE ka GSM) ek tarah ka yellow traffic light lagate hain kuch stocks pe. Matlab stock banned nahi hai, par usme kuch suspicious ho raha hai—jaise price bina kisi reason ke bahut tezi se upar-neeche ho raha hai, ya sirf 20 clients hi zyada volume control kar rahe hain (concentration), ya phir company ke fundamentals weak hain aur promoter ne apne shares zyada pledge kar rakhe hain. Jab aisa hota hai, exchange kehta hai "hum is stock pe nazar rakh rahe hain, tum bhi sambhal ke chalna."

Ab core intuition yeh hai ki jab stock ASM me aata hai (Stage 1 se hi), to woh trade-to-trade yaani T2T ho jata hai. Iska matlab—koi intraday trading nahi, sirf delivery. Tumhe pura paisa upfront dena padega aur shares apne demat me lene padenge, same-day flip nahi kar sakte. Yeh rule isliye hai taaki pump-and-dump scams ruk sakein, jahan koi operator artificially price badha ke innocent retail investors ko phasa deta hai. Jaise-jaise suspicious activity continue hoti hai, stock higher stages (2, 3, 4...) me chala jata hai, aur tab tighter price bands, extra margin, aur bade deposits (ASD) lagne lagte hain—ekdum sakht control.

Yeh tumhare liye kyun matter karta hai? Kyunki as a retail investor, agar tum kisi stock me invest karne ja rahe ho aur woh ASM/GSM list pe hai, to yeh ek clear warning signal hai. Trap me phasne se pehle thoda ruk ke socho—kahin yeh koi manipulated stock to nahi jisme tum apna mehnat ka paisa lagane ja rahe ho. Yeh lists tumhari suraksha ke liye hain, isliye kisi bhi stock me paisa dalne se pehle check kar lena ki woh surveillance me to nahi hai. Yahi smart investing hai, beta!

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