What emergency trading safeguard was first used in the United States after the 1987 crash?

Circuit breakers were the emergency trading safeguards first used in the United States after the 1987 crash.

The Black Monday collapse exposed how rapidly selling could overwhelm exchanges and market participants. In response, United States exchanges introduced trading halts designed to pause activity when prices move beyond specified thresholds. These mechanisms are commonly called circuit breakers or trading curbs.

A pause gives investors, brokers, and clearing systems time to absorb information and reduces the chance that automated or panic-driven orders will cascade without interruption. The rules have changed over time, and modern U.S. markets use coordinated thresholds based on declines in the S&P 500. Individual stocks can also have separate volatility controls.

Circuit breakers do not guarantee that prices will recover or eliminate financial risk. They temporarily interrupt trading under defined conditions. A common mix-up is calling every market closure a circuit breaker: ordinary holidays, technical outages, and government-ordered shutdowns are different from rule-based volatility halts.