A term used in futures markets to describe a rapid and sharp price decline. Breaks generally occur due to unforeseen external factors that affect the spot price of commodities. If a break is large enough, exchange safety measures will be implemented to reduce trading for the day.

A break also refers to a discrepancy in the accounting books of a brokerage firm.


A sudden and unexpected change or move in the price or market value of a security. External factors could include unexpected weather or natural disasters. This type of break is not necessarily something negative as it could occur either upward or downward. A break, or market break, can also occur throughout the entire stock market.

In business, this also refers to a pricing structure that gives different discounts at various volume levels.

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  1. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  2. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  3. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
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    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
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