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Circuit Breaker

Stock exchanges use this tool to put a brake on excessive or unusual boom or speculation in the stock market, usually when the index spurts or plunges by more than 5%. Circuit Breaker suspends trading of shares for some time to let the market cool or settle down. Although Circuit Breaker introduced in Nov 1992 and applied for the first time on 9 March 1993 by the Bombay stock exchange when the Sensex declined by more than 5% from opening level, i.e. from 2451.20 to 2381.26.

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