It refers to the suspension of trading measures taken by the exchange to control risks when the stock index volatility reaches the prescribed circuit breaker point. Specifically, it sets a circuit breaker price for a certain contract before it reaches the price limit, so that A mechanism whereby contract buying and selling quotations can only be traded within this price range within a period of time.

On December 4, 2015, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and China Financial Futures Exchange officially issued regulations related to index circuit breaker. The circuit breaker benchmark index is the CSI 300 Index, using two thresholds of 5% and 7%. It was officially implemented on January 1, 2016 and suspended on January 8, 2016.

On January 8, 2016, with the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange decided to suspend the implementation of the "index circuit breaker" mechanism stipulated in Chapter 4, Section 5 of the "Shanghai Stock Exchange Trading Rules" in order to Maintain the smooth operation of the market.

Extended information:

Function:

1. Provide early warning for trading risks in the stock index futures market, effectively preventing the suddenness and occurrence of risks. the severity of.

Judging from the design of the circuit breaker mechanism of my country's stock index futures, before market fluctuations reach the 10% price limit, a 6% circuit breaker point is introduced, that is, the index point rise or fall of the stock index futures reaches 6%. That is, in the next 10 minutes of trading, the index quotation cannot exceed the circuit breaker point. This not only provides a warning to stock index futures traders, but also provides a warning to all levels of risk management in futures trading.

2. Gain thinking time and operation time to control transaction risks.

Since when the market volatility reaches the 6% circuit breaker point, there will be a 10-minute trading period within the circuit breaker point, which is enough to give traders ample time to consider risk management methods and reflect the risk after resuming trading. The trading instructions of your own operation intention are issued to the exchange for the calculation host to match the transaction.

3. It is helpful to eliminate the decline in liquidity in the futures market caused by obsolete prices.

In the unilateral market where stock index futures fluctuate abnormally, the blockage of a large number of buying orders (or selling orders) will delay the normal display of the market, resulting in stale prices. At this time, what people see The price is actually the price at the last moment. Transactions declared at this price must not be completed;

The continuous large number of non-transaction orders entering the trading system will cause more serious transaction congestion and make the display of data more lagging. . With the 10-minute circuit breaker period, order congestion in the trading system can be eliminated, stale prices can be eliminated, and transactions can be ensured smoothly.

Baidu Encyclopedia - circuit breaker mechanism