Brief introduction to the fuse mechanism of US stocks

The fuse mechanism of US stocks refers to a measure taken to protect investors' interests and maintain market stability when the stock market fluctuates violently. By setting the trigger conditions and the corresponding fuse threshold, once the market falls beyond the threshold, the transaction will be suspended for a period of time, giving the market and investors a buffer time to avoid a chain reaction. Primary fuse

primary fuse is the first step in the fuse mechanism of American stocks, and it is also the most common fuse stage. When the S&P 5 index (S&; P5) When it drops by 7% in the following trading day, it will trigger a primary fuse and the trading will be suspended for 15 minutes. The purpose of this stage is to calm market sentiment and provide investors and exchanges with time to adjust their strategies and systems to avoid excessive panic and market out of control. Secondary fuse

Secondary fuse is the second step in the fuse mechanism of American stocks, and it is also a relatively serious stage. When the S&P 5 index falls by 13% in the following trading day, it will trigger a secondary fuse and the trading will be suspended for another 15 minutes. At this point, the market turmoil exceeds the level of the first-level fuse, and investors and exchanges will have more time to re-evaluate the market trend and risks to prevent the market from further deterioration. Fuse

fuse is the highest level and the most serious stage in the fuse mechanism of American stocks. When the S&P 5 index falls by 2% in the following trading day, it will trigger a fuse and the trading will be suspended for at least one hour. The purpose of this stage is to completely calm the market panic and give investors and exchanges longer time to evaluate the market situation and take necessary measures to prevent the market. The effect and controversy of the fuse mechanism

The implementation of the fuse mechanism in US stocks aims to reduce the violent market fluctuations and protect the interests of investors. The emergence of fuse mechanism can effectively avoid the occurrence of market chain reaction, provide more time for market participants to think calmly and avoid making excessive decisions because of excessive panic.

There are also some opinions about the effect and controversy of the fuse mechanism. Some people think that the fuse mechanism may cause investors to lose trading opportunities and produce greater fluctuations after the market recovers. The fuse mechanism can only temporarily stabilize the market and cannot solve the fundamental problem. Conclusion

As a measure to deal with the drastic market fluctuation, the fuse mechanism of US stocks has improved the stability of the market and the confidence of investors to some extent. Different grades of fuse mechanisms set different thresholds and trading suspension time according to different market fluctuations to adapt to different market demands. The effect and controversy of fuse mechanism need to be evaluated and improved through further research and practice.