The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

CIRCUIT BREAKER Definition & Legal Meaning

Definition & Citations:

1. In General, this is a point in a circuit that has a device that can interrupt and shut down the circuit under specific conditions, such as too much flow, heat, fire. Mainly used in electrical circuits. 2. In Program trading, this is device or method to interrupt the trading of one or more particular stocks under specific conditions, such as sudden fall in a stock’s price or the market overall. Employed after the third Black Monday occurred on October 27, 1997. The objective is to prevent a ‘melt down’ or freefall of market prices.


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