What is it in finance?

circuit breakers are strategies or measures that are used on the stock exchange if it is necessary to avert the feeling that something will happen. The purpose of the circuit breaker is sometimes referred to as a collar is to prevent a panic situation that results in many investors who throw away an extreme amount of securities, because there is a sense of impending accident or significant depression. In principle, the circuit breaker helps to create a stop that keeps the stock exchange on a more even hernia until more sensible thinking prevails among traders.

The most common configuration for the circuit breaker is to initiate a carefully created number of trading stoppers with a price flow rate. In general, the price limits are focused on derivative markets and stocks. By creating this temporary slowdown state, there is a greater chance of the commodity exchange process to continue at a healthy level and does not come from departure.

As a strategy for remedying a temporary situation on the securities market, the circuit breaker is a relatively new shelterp. The concept of circuit breakers was developed only after a smaller accident on the joint market from 1987. Many procedures have been developed and agreed by the main markets with stock exchange and commodities around the world.

In essence, these procedures would include the adoption of specific measures to slow down market activity when a decline in prices reached a certain percentage level. Different markets have a provision for the use of access to circuit breakers when the falls hit the level of ten, twenty or thirty percent. The decline is usually based on monitoring activity on the industrial diameter Dow Jones. When a rapid decline hit ten percent, it is likely that access to the circuit breaker will be implemented at least in some major markets. To date, however