What is a circuit breaker in the stock market?
Market Basics
A circuit breaker is an exchange-mandated trading halt triggered when an index or stock moves beyond a set percentage, meant to curb panic-driven volatility.
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Circuit breakers apply at both the market-wide level (index-based, halting all trading) and the individual stock level (price bands halting a specific stock). They give traders a cooling-off period during extreme moves, preventing a cascade of panic selling or buying from spiraling further.
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