Shock Absorber

What is Shock Absorber?

Shock Absorber meaning A temporary restriction in the trading of certain stock index futures contracts that becomes effective following a significant intraday decrease in stock index futures prices. Designed to provide an adjustment period to digest new market information, the restriction bars trading below a specified price level. Shock absorbers are generally market specific and at tighter levels than circuit breakers.

 

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