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Trading Curb

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Financial Dictionary

Trading Curb

A temporary restriction on program trading in a particular security or market, usually to reduce dramatic price movements. Also known as a collar or circuit breaker.

Investopedia Commentary

When the "curbs are in" at the NYSE, it means that certain types of trading are restricted to prevent volatility. Depending on the situation, this can mean that either all trading is halted or that certain sales can be executed only on an uptick. This kind of rule was implemented after the crash of 1987 (Black Monday), as program trading was thought to be a primary cause of the drop.

Related Links

The Greatest Market Crashes
How Investors Often Cause The Market's Problems
Capitulation Defined

See also: Black Monday, Circuit Breaker, Collar, Program Trading, Trading Halt

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