Broker Check

Circuit Breakers

| March 09, 2020
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At a business networking meeting on Monday, a somewhat wide-eyed and panicked participant asked the financial professional “Why did the stock market close down?!!!” What they meant was, “why was a circuit breaker activated”? Put in place to help support the stock market in periods of significant decline in a short period of time, these trading halts help with volatility management by taking a pause. Circuit breakers may also be triggered should a particular stock have sharp price rise due to speculation. Circuit breakers might also be triggered if there is concern that a particular price is being manipulated. These are protective ways of regulation. While trading halts have not been used in the market in over 10 years, these are ways to help manage the marketplace. If you have questions about market volatility or any aspect, don’t panic, ask your financial professional who can assist you toward aligning your goals, objectives, asset allocation and risk tolerance as well as keeping things in perspective.

Seek professional advice before taking any action in regard to your finances.

This information is provided for general educational purposes only and not intended to provide specific advice to any individual.

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