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Circuit Breaker


A stock market mechanism that aims to maintain price continuity during highly volatile periods. It will help reduce or rein in volatility and prevent massive panic sell-offs. When circuit breaker is active, traders can have time to cool off, grasp the market events, and reconsider their trades in a better light. Circuit breaker halts trading or puts a price band/ market protection limit on every share trading on the exchange until volatility gets back to normal. In that sense, circuit breakers help stem market crashes before occurrence.

Circuit break is a type of market curbs.



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This section covers a wide-ranging array of terms and concepts, among others, in the area of exchanges and financial marekts at large ...
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