468. What is a circuit breaker in stock exchange?
A circuit breaker is a financial regulatory instrument that is in place to prevent stock market crashes from occurring. Since their inception, circuit breakers have been modified to prevent both speculative gains and dramatic losses within a small time frame. As a result of being triggered, circuit breakers either stop trading for a small amount of time or close trading early in order to allow accurate information to flow amongst market makers and for institutional traders to assess their positions and make rational decisions.