How circuit breakers work

[roblogic]

Hello,

Can somebody explain how these circuit breakers work for the trader?

Is it possible to be caught on a position and then when the market reopens have a huge loss, much bigger than the stop loss?

Will StopLoss orders or TakeProfit orders work in this case ?

I'd appreciate if somebody can shed some light on this subject. Thanks.

[NinjaTrader_Marco]

Hello roblogic,

Thanks for your post.

You would be unable to manage a position if the exchange has hit its lock limit, which halts all trading. I would expect at the moment a lock releases, if the price changes drastically, a limit order may not fill, but a pending market order would and would fill at the market price at the time of the fill. This is an inherent risk of electronic trading. Further information can be found at the publicly available exchange links below:

• https://ninjatrader.com/blog/order-desk-updates/
• https://ninjatrader.com/blog/what-ar...tures-trading/
• https://www.cmegroup.com/trading/pri...ml#equityIndex
• https://www.cmegroup.com/trading/equ...ce-limits.html
• https://www.nyse.com/markets/nyse/trading-info

Please let me know if I may be of any further assistance.

[MojoJojo]

Here is an example from yesterday, 50 vol/bar chart which is almost nothing for ES.


In case you were long and had a stop loss below the first limit down level ~2555, with almost no liquidity it was unlikely that your stop would have filled even above the third limit down level ~2445. Of course this is an extreme example, but highlights that suffering extreme losses or having huge profits is possible.