- circuit breaker
- A procedure that temporarily halts trading on all US stock markets for one hour when the Dow Jones Industrial Average falls 250 points or more within a trading day. The pause is designed to allow time for the markets to absorb the news that precipitated the decline. Should the average fall another 150 points within the same day, trading would again be halted, this time for two hours. Exchange Handbook Glossary
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circuit breaker UK US noun [C]► a piece of equipment that stops the flow of an electric current, used to prevent damage to the wires and equipment that are connected to it: »If your internet access is out, it could be that a circuit breaker was tripped during a storm.
► STOCK MARKET a rule that temporarily stops trade on a stock market or closes it when prices go down to a particular level too quickly: »The New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence.
»There are three circuit-breaker thresholds—10%, 20%, and 30%— calculated at the beginning of each quarter.
Financial and business terms. 2012.