circuit breaker

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Related to Power circuit breaker: Air Circuit Breaker

Circuit Breaker

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 suspends trade for at least one hour. A circuit breaker is intended to allow investors to determine whether a situation is really as bad as it looks. It is sometimes called a collar. See also: Suspended trading.

circuit breaker

The automatic response, usually a halt or slowdown, in activity at an exchange in response to certain occurrences in trading. Circuit breakers are designed to reduce market volatility and were instituted following the large market breaks in October 1987 and October 1989. See also Rule 80A, suspended trading.

Circuit breaker.

After the stock market crash of 1987, stock and commodities exchanges established a system of trigger-point rules known as circuit breakers. They temporarily restrict trading in stocks, stock options, and stock index futures when prices fall too far, too fast.

Currently, trading on the New York Stock Exchange (NYSE) is halted when the Dow Jones Industrial Average (DJIA) drops 10% any time before 2:30 p.m., sooner if the drop is 20%.

But trading could resume, depending on the time of day the loss occurs. However, if the DJIA drops 30% at any point in the day, trading ends for the day.

The actual number of points the DJIA would need to drop to hit the trigger is set four times a year, at the end of each quarter, based on the average value of the DJIA in the previous month.

The only time the circuit breakers have been triggered was on October 27, 1997, when the DJIA fell 554 points, or 7.2%, and the shut-down level was lower. In fact, the DJIA has dropped as much as 10% in a single day only three times in its history.

References in periodicals archive ?
The circuit breakers used in low-voltage switchgear are low-voltage power circuit breakers and they are rated at 600 VAC and between 800 and 5000 amp.
From the amount of power coming into the facility, to the quality of the power, to where the power needs to be distributed, new low-voltage power circuit breakers give users the knowledge to help avoid costly downtime.
UL 1558, "Metal-Enclosed Low-Voltage Power Circuit Breaker Switchgear," Underwriters Laboratories Standard, Fourth Edition, February 25, 1999.
Developed to maximize the functionalities of ABB's popular Emax power circuit breakers, the Emax Link is designed and constructed to provide superior power distribution, protection, and safety, providing DEMs with an advanced solution to withstand the mechanical, electrical and thermal stress found in a wide variety of manufacturing environments.
The company just released Masterpact NT and NW low arc flash rated power circuit breakers to provide protection for both overcurrent and arc flash conditions.
A control switch relay (CSR) available from Electroswitch provides both manual and supervisory control of power circuit breakers.
The heightening use of electrical machinery, automation systems, computers, security systems and other sensitive electronic equipment will bolster sales of products such as voltage regulating transformers, advanced switchgear systems and power circuit breakers capable of controlling and monitoring incoming electric power.
Electroswitch has designed a Control Indicator Module (CIM) that contains SCADA interface for remote control and monitoring of power circuit breakers and reclosers.
The best opportunities will exist in power circuit breakers and power transformers, with annual increases in demand of 4.6 percent and 5.6 percent respectively through 2004.