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Circuit breakers

Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025

Definition

Circuit breakers in the context of securities exchanges are mechanisms designed to temporarily halt trading on an exchange to curb panic-selling and prevent excessive market volatility. They are triggered when prices of securities fall or rise beyond predetermined thresholds within a trading day.

"Circuit breakers" also found in: