Microstructure · Core
Circuit Breaker
A circuit breaker is an exchange halt when prices move too far too fast — a pause so the book can rebuild, not a valuation.
Definition
Index-wide breakers (7/13/20% in the US) and single-stock LULD bands pause matching. Auctions reopen. The halt is a microstructure valve. It does not cap the eventual price.
Why it matters
Gaps and stop cascades meet a timer. Liquidity after the reopen is a different market than the last print before the halt.
Case
March 2020 S&P breakers. The halt stopped the waterfall for 15 minutes; the reopen still printed lower. The breaker bought a book, not a floor.
How to read it
Know the band, the halt length, and whether your order is queued or cancelled. A stop sitting through a halt is a market order into the reopen.
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