Shock Absorber


DEFINITION of 'Shock Absorber'

A temporary restriction placed on the trading of index futures because of substantial intraday decreases in the underlying indexes.

BREAKING DOWN 'Shock Absorber'

Shock absorbers are very similar to circuit breakers. However, these restrictions are more specific as they isolate a single index and are enacted at a tighter level. The shock absorbers restrict trading and provide a period of information and pricing absorption for the holders of index futures contracts.

  1. Index Futures

    A futures contract on a stock or financial index. For each index ...
  2. Trading Halt

    A temporary suspension in the trading of a particular security ...
  3. Circuit Breaker

    Refers to any of the measures used by stock exchanges during ...
  4. Index

    A statistical measure of change in an economy or a securities ...
  5. Collar

    1. A protective options strategy that is implemented after a ...
  6. Intraday

    Another way of saying "within the day". Intraday price movements ...
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