Which event prompted the NYSE to implement trading curbs, or 'cooling-off periods' after a major market crash?

Which event prompted the NYSE to implement trading curbs, or 'cooling-off periods' after a major market crash?

• A. The Great Depression of 1929
• B. The bursting of the dot-com bubble in 2000
• C. The Black Monday market crash of 1987
• D. The Asian financial crisis of 1997

Answer: (C)

Trading curbs are designed to pause trading when prices move too fast, giving investors time to digest information and preventing a panic-driven spiral. The measures were introduced after a dramatic, single-day collapse showed how quickly volatility can spike and liquidity can dry up. The Black Monday crash of 1987, when major indices plunged sharply in one day, exposed this risk and led regulators and exchanges to implement market-wide circuit breakers with predefined decline thresholds and trading halts. These cooling-off periods aim to restore orderly price formation and curb cascading selling. Other events listed, while significant in their own right, did not prompt the initial introduction of these broad trading curbs in the same way.

Trading curbs are designed to pause trading when prices move too fast, giving investors time to digest information and preventing a panic-driven spiral. The measures were introduced after a dramatic, single-day collapse showed how quickly volatility can spike and liquidity can dry up. The Black Monday crash of 1987, when major indices plunged sharply in one day, exposed this risk and led regulators and exchanges to implement market-wide circuit breakers with predefined decline thresholds and trading halts. These cooling-off periods aim to restore orderly price formation and curb cascading selling.

Other events listed, while significant in their own right, did not prompt the initial introduction of these broad trading curbs in the same way.