Stock markets use automatic circuit breakers to stop panics

When a stock market begins to collapse too quickly, it does not simply crash until the end of the day. Modern exchanges use a mechanism called a circuit breaker, which acts like a digital emergency brake. If a major index drops past a specific percentage threshold, the exchange automatically freezes all trading for a set period, usually around twenty minutes. This forced pause is designed to give investors a moment to breathe and prevents high speed computer algorithms from spiraling into a feedback loop of selling.