Circuit Breaker
서킷브레이커
A market stabilization mechanism that halts all trading for a set period when a stock index falls below predetermined thresholds, designed to prevent panic selling and give investors time to assess information. First introduced by the New York Stock Exchange after the 1987 Black Monday crash, it was adopted in South Korea in 1998 following the Asian financial crisis and operates as a three-tier system (8%, 15%, 20% declines) on both KOSPI and KOSDAQ markets. While intended to cool markets and reduce information asymmetry, circuit breakers exhibit a 'magnet effect' (accelerated selling as the threshold approaches) and often amplify volatility upon trading resumption.
Sources
- Wikipedia (EN) origin (post-1987 Black Monday), US SEC Rule 80B three-tier system, magnet effect and price discovery critiques
- Wikipedia (KO) Korean introduction date (1998.12.07), three-tier thresholds (8%/15%/20%), 20-minute halt + 10-minute single-price auction, relation to sidecar
- kbthink.com KB Kookmin Bank/Korea Economic Daily financial dictionary: definition, Korean 3-tier operation, 2026.03.04 triggering instance, Chinese circuit breaker (2016)