noun Internet Slang

circuit breaker

SUR-kit BRAY-kur · noun · informal

An automatic trading halt triggered by a large market drop.

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Definitions

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A circuit breaker is a regulatory mechanism that halts trading market-wide when an index falls a set percentage, to curb panic. On the S&P 500, a 7% drop triggers a Level 1 halt and 13% a Level 2 halt of 15 minutes.

“Stocks fell so fast at the open that a circuit breaker halted trading for fifteen minutes.”
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circuit breaker In A Sentence

Stocks fell so fast at the open that a circuit breaker halted trading for fifteen minutes.

Origin & Usage

Borrowed from electrical circuit breakers that cut the current to prevent damage. Introduced after the 1987 crash.

Variants market circuit breakertrading halt
Tags #finance#stocks#wsb#mechanics#regulation

People Also Ask

What is a circuit breaker in the stock market?

It's a regulatory mechanism that halts trading market-wide when an index falls a set percentage, designed to curb panic selling.

What triggers a circuit breaker?

On the S&P 500, a 7% drop triggers a Level 1 halt, 13% a Level 2 halt (each a 15-minute pause), and 20% a Level 3 halt that closes trading for the day.

Where does the term come from?

It's borrowed from electrical circuit breakers that cut the current to prevent damage; market circuit breakers were introduced after the 1987 crash.

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