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What does it mean that the stock market is blown?

When the stock market drops by 5%, the fuse mechanism will be triggered, and trading will be suspended for 15 minutes. When the market drops by 7%, the fuse mechanism will be triggered for the second time, and trading will be suspended until the market closes.

In order to prevent the stock market from fluctuating greatly, European and American stock markets generally have a fuse mechanism, because there is no daily limit system in European and American stock markets, and they can be short, which can prevent some panic selling and calm investors.

Extended information:

The function of the fuse system for stock index futures is mainly shown in the following aspects:

1. It provides an early warning function for trading risks in the stock index futures market, effectively preventing the suddenness and seriousness of risks. Judging from the design of the fuse mechanism of China's stock index futures, a fuse point of 6% was introduced before the market fluctuation reached the price limit of 1%, that is, the index point of stock index futures rose and fell by 6%.

that is, in the next 1 minutes of trading, the index quotation cannot exceed the fuse point, which not only gives a warning to the traders of stock index futures, but also gives a warning to the risk management at all levels of futures trading.

At this time, there is a strong reminder to the traders, agent members, settlement members and exchanges of futures stock index futures, so that they all realize what the future transaction will be like and take corresponding preventive measures, so that the trading risk will not suddenly occur without any warning.

2. To gain thinking time and operation time for controlling trading risks. Because when the market fluctuation reaches 6% of the fuse point, there will be a 1-minute transaction within the fuse point, which is enough for traders to have enough time to consider the risk management method and reach the exchange for the computer host to match the transaction after resuming the transaction.

Baidu encyclopedia-fuse mechanism