Circuit Breaker, also known as automatic trading suspension mechanism, refers to the trading suspension measures taken by the exchange to control risks when the stock index volatility reaches the specified circuit breaker. Specifically, it is a mechanism to set a circuit breaker price for a contract before reaching the price limit, so that the purchase and sale price of the contract can only be traded within this price range for a period of time.
The circuit breaker mechanism of the US stock market specifically means that the New York stock market fell 7%, and trading was suspended for 15 minutes before 3:25 p.m; Trading will not be suspended after 3:25. It dropped 13% and suspended trading for another 15 minutes before 3:25 p.m; Trading will not be suspended after 3:25. A drop of 20%, once triggered, the market will be closed immediately.
On March 9, 2020, the New York stock market fell sharply at the opening, and then the decline reached the upper limit of 7%, triggering the circuit breaker mechanism. After the resumption of trading, the decline once narrowed. At the closing, the three major stock indexes of the New York stock market fell more than 7%. On March 12, the three major stock indexes of the United States suffered sharp falls after the opening. The Dow Jones index fell more than 1400 points in the opening session, and the Standard&Poor's 500 index fell more than 6%. Market analysis believes that the S&P 500 may soon fall through the 7% circuit breaker again, leading to the second 15 minute circuit breaker in the US stock market this week. On March 16, three major U.S. stock indexes fell sharply at the opening, and the S&P 500 index fell more than 7%, triggering the circuit breaker mechanism and closing for 15 minutes.