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.