A circuit breaker is the market safeguard that automatically pauses trading after unusually large price movements. The mechanism was introduced in the United States after the Black Monday crash of 1987.
Circuit breakers are designed to give investors time to absorb information and reduce panic-driven selling or buying. Depending on the market and rule set, a halt can apply to an individual security or to a broad index such as the S&P 500.
A circuit breaker is not the same as a margin call. A margin call demands additional collateral from an investor whose account has fallen below required levels, while a circuit breaker temporarily restricts trading across a specified market or security.