Circuit breakers explained

Jul 9 18:23

What are circuit breakers?

Circuit breakers are measures implemented by exchanges when they consider price movements to be overly volatile. They can take the form of a trading suspension or limiting buying and selling of securities within a specific price range.

Purpose:

Circuit breakers can be triggered to curb in panic-selling or manic-buying.

Applicable assets:

The circuit breaker system applies to both individual securities and market indexes. As a result, it applies to options market as well -- if the stock market triggers a circuit breaker, the affected listed options markets will also halt trading.

How circuit breakers work in different markets

Jurisdictions and stock exchanges have their own rules for what circuit breakers entail, when do they kick in, and for how long they are in place.

U.S. Stock Market

Asian Stock Markets

Source: CNBC, Investopedia

$S&P 500 index(.SPX.US)$$Dow Jones Industrial Average(.DJI.US)$$Nasdaq Composite Index(.IXIC.US)$$NASDAQ 100 Index(.NDX.US)$$iShares NASDAQ 100 Index ETF(02834.HK)$$Hang Seng Index ETF(02833.HK)$$Hang Seng Index(800000.HK)$$SSE Composite Index(000001.SH)$$Hang Seng China Enterprises Index ADR(.HCIADR.US)$$FTSE Singapore Straits Time Index(.STI.SG)$

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Circuit breakers explained

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