Circuit breaker
A trading halt triggered when prices fall past set thresholds, designed to pause panic selling.
A circuit breaker is a rule that pauses trading when prices move sharply. For US equities, market-wide circuit breakers apply when the S&P 500 falls 7, 13 or 20 percent from the prior close, and the length of the halt depends on the level and the time of day. Individual stocks have separate limit-up and limit-down bands that pause trading in a single name.
On our site, a halt is labeled on the instrument page and in alerts. Trades do not occur during a halt, so the last price may not reflect where the market would clear.
Traders care because a halt can prevent exits and stop orders from filling, and the reopening price after a halt can be much further from the prior price than the move that caused it.
Worked example (illustrative numbers, not real data): the index closed at 5,000. A 7 percent decline takes it to 4,650 and triggers a halt. Stop orders set at 4,700 cannot execute until trading resumes, and a reopening at 4,600 would fill them at a worse price.