Circuit Breaker
Key Points
- Borsa Istanbul applies both index-based and stock-based breakers; trading halts for a set period and resumes with a single-price auction.
- A breaker trigger signals unusual volatility and news flow and gives investors time to digest new information.
- a breaker does not stop a decline, it only slows it; the price can gap on reopening.
How It Works
a stock-based breaker triggers when the price moves beyond the percentage set by Borsa Istanbul from the last reference price. The index-based breaker triggers when BIST 100 falls by the set ratios from the previous close, with a shorter halt on the first trigger and a longer one afterwards.
Interpretation
A breaker trigger signals unusual volatility and news flow and gives investors time to digest new information. After the halt, orders are collected in a single-price auction and an equilibrium price is set.
Pitfalls
a breaker does not stop a decline, it only slows it; the price can gap on reopening. Pending orders may be cancelled during the halt. It is a different mechanism from the ceiling/floor price rule.
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Frequently Asked Questions
What is Circuit breaker?
A circuit breaker is an automatic mechanism that temporarily halts trading when an index or stock price moves beyond a set threshold.
How does Circuit breaker work?
a stock-based breaker triggers when the price moves beyond the percentage set by Borsa Istanbul from the last reference price. The index-based breaker triggers when BIST 100 falls by the set ratios from the previous close, with a shorter halt on the first trigger and a longer one afterwards.
Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy