Circuit Breaker

What Does Circuit Breaker Mean?
Refers to any of the measures used by stock exchanges during large sell-offs to avert panic selling. Sometimes called a "collar."

Investopedia explains Circuit Breaker
After an index has fallen a certain percentage, the exchange might activate trading halts or restrictions on program trading. For example, if the Dow Jones Industrial Average falls by 10%, the NYSE might halt market trading for one hour. There are other circuit breakers for 20% and 30% falls.

Related Terms

Black Monday
Collar
Curbs In
Curbs Out
Panic Selling
Program Trading
Stock Market Crash Of 1987
Trade Resumption
Trading Curb
Trading Halt
More Related Terms

Related Links

Panic Selling - Capitulation Or Crash? - Find out what it means when investors are selling off their stocks for safer investments.
The Greatest Market Crashes - From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.
Market Problems? Blame Investors - Investors are only human, and their irrational behavior can often move the market.
NasdaqTrader.com - Triggers for circuit breakers on the Nasdaq.

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