How Stock Circuit Breakers Work

The video discusses the global use of circuit breakers in financial markets, highlighting their role in mitigating market meltdowns and addressing erroneous trades. It examines a case study in China where circuit breakers exacerbated market panic, leading to their suspension. The video also covers the introduction of circuit breakers in the US and EU, following significant market events. It presents arguments for and against their use, noting that while they can restore market calm, they may also interfere with efficient pricing and fail to reduce volatility.

What are the arguments for and against the use of circuit breakers?

How did circuit breakers evolve after the 1987 crash?