Circuit Breakers

What is Circuit Breakers?

Circuit Breakers meaning A system of coordinated trading halts and/or price limits on equity markets and equity derivative markets designed to provide a cooling-off period during large, intraday market declines. The first known use of the term circuit breaker in this context was in the Report of the Presidential Task Force on Market Mechanisms (January 1988), which recommended that circuit breakers be adopted following the market break of October 1987.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary