| a device for damping sudden and rapid motion, as the recoil of a spring-mounted object from shock. |
shock absorber  (click for larger image in new window) n. A device used to absorb mechanical shocks, as a hydraulic or pneumatic piston used to dampen the jarring sustained in a moving motor vehicle. |
Shock Absorber
A temporary restriction placed on the trading of index futures because of substantial intraday decreases in the underlying indexes.
Investopedia Commentary
Shock absorbers are very similar to circuit breakers. However, these restrictions are more specific as they isolate a single index and are enacted at a tighter level. The shock absorbers restrict trading and provide a period of information and pricing absorption for the holders of index futures contracts.
See also: Circuit Breaker, Collar, Index, Index Futures, Intraday, Trading Halt