Circuit Breaker
A circuit breaker is a regulatory mechanism used by exchanges to temporarily halt all trading activities across the entire market. It is implemented to prevent panic selling, especially when markets experience significant declines. Circuit breakers are triggered when an index reaches specific percentage thresholds. On the National Stock Exchange (NSE), the current circuit breaker limits are as follows: - 10% move before 1:00 pm: Trading halt for 45 minutes. - 10% move between 1:00 pm and 2:30 pm: Trading halt for 15 minutes. - 10% move after 2:30 pm: No trading halt. - 15% move before 1 pm: Trading halt for 1 hour 45 minutes. - 15% move between 1:00 pm and 2:00 pm: Trading halt for 45 minutes. - 15% move after 2:00 pm: Trading halt for the remainder of the day. - 20% move: Trading halted for the remainder of the day. These circuit breakers help restore order in volatile markets and protect investors from extreme losses.
Related Terms
Commodity Exchange
A commodity exchange is a marketplace where standardized commodities and related derivative contracts are traded....
Autoregressive Model
An autoregressive (AR) model is used to predict future values of a time series based...
Advance Payment Guarantee/Bond
An Advance Payment Guarantee (APG) or Bond is a contract where a third party agrees...
Industry Analysis
Industry analysis is a technique for evaluating an industry’s competitive landscape, potential profitability, supply-demand dynamics,...
Bottom Up Investing
Bottom-up investing is a stock selection approach that prioritizes the detailed analysis of individual companies...
Cash Commodity
A cash commodity, also called an 'actual,' is a tangible goods—such as aluminum, cotton, gold,...
