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Circuit breaker
A defensive regulation which some stock exchanges have to limit the damage of a sharp fall in prices. The reasoning behind them is that downward price movements attain their own dangerous momentum and can lead to panic selling. Circuit breakers allow the exchange to suspend trading or in some way limit it to stop things getting out of hand.On the New York Stock Exchange, for instance, there are rules which allow the exchange to stop trading for the rest of the day if the Dow index falls 30% from the previous day's close.
Similar MatchesCircuit breakersCircuit breakers
Measures instituted by exchanges to stop trading temporarily when the market has fallen by a certain percentage in a specified period. They are intended to prevent a market free fall by permitting buy and sell orders to rebalance.
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