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 ?
S banks affected by the trading curbs, since they won't be allowed to engage in certain self-destructive activities.
But bankers, their lobbyists, and the politicians who do their bidding are eager to heap outsize blame on new national and international bank rules, including trading curbs, consumer protections and higher capital requirements.
Though he considers there to be little need for dark trading curbs to support price formation on the displayed markets -- given the fact that investors will always want to trade at the bid and offer price, compared to the mid-point execution offered by most dark pools -- Higgins stresses the need for clearer and more granular trading data ahead of any policy decision being reached on dark pool restrictions.