Market mechanics

    What are circuit breakers (Limit-Up/Limit-Down) and what triggers a market halt?

    By Easy Money Scanner · Educational reference · Not investment advice

    The short answer

    Circuit breakers are exchange-wide trading halts triggered by sharp index declines (7%, 13%, 20% from prior close), while Limit-Up/Limit-Down (LULD) pauses individual stocks that move outside set price bands.

    How it works

    Market-wide circuit breakers can halt all trading for 15 minutes or close markets for the day, while LULD bands widen or narrow based on volatility and time of day to curb extreme single-stock swings.

    An example

    If the S&P 500 falls 7% intraday before 3:25 p.m. ET, a Level 1 circuit breaker pauses trading across U.S. equity markets for 15 minutes.

    Risk & limitations

    Halts can trap open orders and cause sharp price gaps once trading resumes, so stop orders may fill far from your intended price.

    Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.

    Sources & further reading

    Easy Money Scanner provides informational tools using machine learning. This is not investment advice. Trading involves substantial risk of loss. Read full disclaimer →