Friends who are new to 50ETF options are unfamiliar with every aspect of 50ETF options and will be curious. Now let’s talk about what are the triggering conditions of the “circuit breaker mechanism” in 50ETF options trading?

The circuit breaker mechanism is actually also called the automatic suspension mechanism. Throughout the stock market, when a stock reaches its price limit, a circuit breaker price will appear. This means that in the next period of time, investors can only make buy and sell quotes within this price range.

There are two conditions for triggering the circuit breaker mechanism:

The first condition: During the continuous bidding transaction, the intraday trading price of the contract increases or decreases by Or more than 50%.

Image and text source: Baidu Caishun Options

The second condition: the absolute value of the price increase or decrease reaches or exceeds 5 times the minimum quotation unit of the contract (0.0001).

Both of these conditions are indispensable, and both conditions must be present to trigger.

The circuit breaker mechanism is one of the results of institutional innovation that China has learned from foreign experience and based on the actual situation of my country's capital market. There is no circuit breaker mechanism introduced in domestic stock trading and commodity futures trading. At the beginning of the innovative development of financial futures, China Financial Futures Exchange drew on advanced international experience and took the lead in launching the circuit breaker system as an important risk management system, with the purpose of better controlling risks.

The establishment of the circuit breaker mechanism provides a "shock absorber" for market transactions. Its essence is to set up a transitional gate before the price limit system is activated, giving the market a certain period of cooling-off period. Warn investors of risks in advance and gain time and opportunities for relevant parties to take relevant risk control means and measures.

After the daily opening, whenever the quoted price of a contract touches the circuit breaker price and lasts for one minute, the circuit breaker mechanism will be activated for the contract.

The above is the content about the 50ETF option circuit breaker compiled by the editor of Caishun Options for reference and study.