Circuit Breakers (CB) is a scheme designed to halt all trading in the market in order to provide cooling-off time for investors to analyze the market situation when the KOSDAQ index falls more than a certain level compared to the previous trading session.
Trading halt by Circuit Breakers
Requirement for Circuit Breakers
  • Phase 1 : All stock trades are halted when the KOSDAQ index declines 8% or more compared to the previous day’s closing value and lasts for 1 minute.
  • Phase 2 : After the trading halt by phase 1 and resumption thereafter, if KOSDAQ index declines 15% or more than that of previous day and at the same time if the index declines 1% additionally and lasts for 1 minute compared with the index value at which phase 1 was triggered, all trades are halted.
  • Phase 3 : Following the phase 1 and 2 trading halts and resumption thereafter, all trades are halted if the KOSDAQ index decreases 20% or more than the previous day’s closing value and additional 1% decline occurs and lasts for 1 minute compared with the index where phase 2 was triggered.
  • The implementation of the each phase of Circuit Breakers is limited to one time in one day. Phases 1 and 2 are not triggered during 40 minutes before the market closing whereas phase 3 is triggered during that time period.
Effect of Circuit Breakers
  • During phase 1 and 2 Circuit Breakers, all trades and all orders in KOSDAQ market are halted except the cancellation orders
  • All orders (excluding cancellation orders) and trades in KOSDAQ150 index futures, single stock futures market are also halted.
  • When phase 3 is triggered, all trades in KOSDAQ market are halted (The market is closed).
Resumption of trading
  • Trades are resumed 20 minutes after the halt in case of phase 1 and 2.
  • When trades are resumed, the first price is determined by the single price auction with bid and offer orders collected for 10 minutes from the time that trades are resumed.
  • In case of phase 3, no trade can be resumed on the day.