Lesson Circuit breakers

Single stock circuit breakers

Learn what single stock circuit breakers are and how they can affect you.

Single stock circuit breakers ("SSCBs"), are tools used by stock exchanges to prevent large, sudden price moves in a stock and/or extraordinary market volatility. When a SSCB is triggered, there is an initial trading halt of five minutes for the applicable security, which may be extended for a further five-minute period at IIROC’s discretion. 

In Canada, an SSCB for Qualifying Securities (except Leveraged ETFs) is triggered in the event of a price increase or decrease of (one of the following): 

  • At least 10% and 20 trading increments (the price interval at which an order may be submitted and traded) in a five-minute period between 9:50 a.m. and 3:30 p.m.
  • At least 20% and 40 trading increments in a five-minute period between 9:30 a.m. and 9:50 a.m.
  • At least 20% and 40 trading increments in a five-minute period during the 30-minute period following the resumption of trading after a regulatory halt, including a regulatory halt caused by the triggering of a SSCB.
For Leveraged ETFs, trigger levels are calculated by multiplying the trigger levels for qualifying securities with the leverage ratio of the Leveraged ETF. For example, a qualifying Leveraged ETF with a 2:1 ratio will have trigger levels set at twice the usual level of a qualifying non-Leveraged ETF.
In the US, SSCBs are more commonly known as limit-up/limit-down (“LULD”). To learn more about how LULD work in US markets you can read this article from Nasdaq.

Note: The information in this blog is for information purposes only and should not be used or construed as financial, investment, or tax advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied is made by Questrade, Inc., its affiliates or any other person to its accuracy.

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