Question

What Is Circuit Breaker In Stock Market

Answer 1

Answer:

Circuit breakers are regulatory measures to temporarily halt in trading on an exchange, which are in place to curb panic-selling. ... Circuit breakers function automatically stopping trading when prices hit predefined levels, such as a 7%, 13%, and 20% intraday move for the S&P 500. Circuit breakers a form of market curbs.

Explanation:

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Answer 2

Circuit Breaker in stock market basically refers to a transient or temporary stop in trading activities in the stock market to offset any undesirable impact of panic driven stock or share trading.

Explanation:

• Circuit breaker is a practice of putting a temporary hold on all the trading activities in stock or share market especially when the stock or share prices reach a certain pre-specified level.
• Circuit breaker can be considered as a temporary emergency measure to eliminate the detrimental financial impacts of panic driven stock or share trading that might be impelled by various external factors or attributes such as changes in government policy/s,any major political or economic event,a natural or biological calamity such as large scale flood,cyclone or corona outbreak etc.
• Circuit breaker has been criticized by many financial and market exerts as a forcible market intervention to stabilize the stock market amidst any kind of large scale crisis.As argued by them,the market should be allowed to re-stabilize naturally without any disruptive external manipulation.