Know what Circuit Breaker is in Stock Market

To curb excessive volatility, circuit breakers are triggered on the basis of three thresholds for stock movement -- 10 per cent, 15 per cent and 20 per cent.

New Delhi: Stock market witnessed a halt in trading for the first time in more than 12 years on Friday morning after benchmarks hit circuit breakers on panic selling triggered by concerns over coronavirus pandemic.

The BSE and NSE stopped trading for 45 minutes starting from little past 9.20 am.

To curb excessive volatility, circuit breakers are triggered on the basis of three thresholds for stock movement -- 10 per cent, 15 per cent and 20 per cent.

Circuit breaker limits

The BSE and the NSE compute the index circuit breaker limits for 10 per cent, 15 per cent and 20 per cent levels on a daily basis based on the previous day's closing level of the index rounded off to the nearest tick size, HDFC Securities said citing regulatory framework.

For 10 per cent movement before 1 pm, trading is halted for 45 minutes. The break time is 15 minutes for 10 per cent movement between 1 pm and 2.30 pm while there would be no halt in case the same happens after 2.30 pm.

As per norms, trading would be halted for 1.45 hours if there is 15 per cent movement before 1 pm and 45 minutes for such movement between 1 pm and 2 pm. Trading would be stopped for the day in case the 15 per cent movement is on or after 2 pm.

Finally, a 20 per cent movement at any point of time would result in complete halt of trading for the day.

(PTI Report)