Trading Curb

AAA

DEFINITION of 'Trading Curb'

A temporary restriction on program trading in a particular security or market, usually to reduce dramatic price movements. Also known as a collar or circuit breaker.

INVESTOPEDIA EXPLAINS 'Trading Curb'

When the "curbs are in" at the NYSE, it means that certain types of trading are restricted to prevent volatility. Depending on the situation, this can mean that either all trading is halted or that certain sales can be executed only on an uptick. This kind of rule was implemented after the crash of 1987 (Black Monday), as program trading was thought to be a primary cause of the drop.

RELATED TERMS
  1. Directional Trading

    Trading strategies based on the investor’s assessment of the ...
  2. Trading Halt

    A temporary suspension in the trading of a particular security ...
  3. Program Trading

    Computerized trading used primarily by institutional investors ...
  4. Trade Resumption

    To resume trading activities after having been shut down (halted) ...
  5. Suspended Trading

    A stoppage in the trading of a security for an extended period ...
  6. Circuit Breaker

    Refers to any of the measures used by stock exchanges during ...
Related Articles
  1. Understanding Investor Behavior
    Active Trading Fundamentals

    Understanding Investor Behavior

  2. How The Power Of The Masses Drives The ...
    Active Trading Fundamentals

    How The Power Of The Masses Drives The ...

  3. Connecting Crashes, Corrections And ...
    Active Trading

    Connecting Crashes, Corrections And ...

  4. Market Problems? Blame Investors
    Options & Futures

    Market Problems? Blame Investors

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center