CIRCUIT BREAKERS

A circuit breaker is a measure to stem the steep fall or a sharp rise in the price of a security / stock or the index as a whole.
▪️ Need for Circuit breaker: Any steep increase or fall in the share market can lead to crash of the entire capital market. Hence, there is a need to halt trading in the share market in event of large-scale fluctuations.
▪️How does it work? The system applies at three stages of the index movement, either way, at 10 per cent, 15 per cent and 20 per cent. These breakers, when triggered, bring about a coordinated trading halt.