Trading Curb


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Trading Curb

On an exchange, a measure designed to prevent panic selling by stopping trading after a security or an index has fallen by a certain amount. For example, if the Dow Jones Industrial Average falls 10% in a trading day, the New York Stock Exchange institutes a trading curb that suspends trade for at least one hour. A trading curb is intended to allow investors to determine whether a situation is really as bad as it looks. It is sometimes called a collar or a circuit breaker. See also: Suspended trading.
References in periodicals archive ?
The stock market regulator imposed trading curbs between August and December 2008 to attempt to halt the slide but the measures had little effect.
In January, the US Commodity Futures Trading Commission proposed to limit speculation, with trading curbs on physically and financially settled crude, natural gas, heating oil and gasoline futures and options contracts.
A decline today in the New York Stock Exchange composite index proved steep enough, however, to trigger trading curbs, which put restrictions on certain types of sell orders.