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Circuit breakers: what are they and how do they help markets

Exchanges have a cooling device for overheating markets

Circuit breakers: what are they and how do they help markets
Photo: Getty Images

Stock markets are getting too hot to handle — but exchanges have a cooling device for just such occasions.

When volatility hits markets, or individual stocks suffer particularly big price moves, the gyrations can trigger circuit breakers, tools that temporarily halt or constrain trading activity.

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