Circuit Breaker

Refers to any of the measures used by stock exchanges during large sell-offs to avert panic selling. Sometimes called a "collar."




Taobiz explains Circuit Breaker
After an index has fallen a certain percentage, the exchange might activate trading halts or restrictions on program trading. For example, if the Dow Jones Industrial Average falls by 10%, the NYSE might halt market trading for one hour. There are other circuit breakers for 20% and 30% falls.