[jzwinck]

Presumably a circuit breaker. Many exchanges have these now. The Japanese stock exchange has a particularly nice one which pauses every 3% for people to think about what they are doing. That makes stop loss orders behave more in line with people's expectations.

[JadeNB]

> The Japanese stock exchange has a particularly nice one which pauses every 3% for people to think about what they are doing.

Sorry, as a non-finance-savvy person: 3% of what? (I guess also: what is a 'circuit breaker' in this context?)

[BenchRouter]

If the index (presumably the Nikkei, similar to the S&P 500) drops 3% in a single day, the stock exchange will stop all trading for a period of time.

This gives people the chance to cool off and not sell blindly in a panic, hopefully returning behavior to normal.

It also gives people the chance to intercept automated systems (stop-loss orders, things like that) if it's clear that e.g. it's a "flash crash" and not a more legitimate (for lack of a better term) drop.

It's a circuit breaker in the same way that a regular one works: It stops all activity (all trading) in order to protect the system (the economy) in the event that too much current is flowing through (too many sell orders, or too much volatility in the market).