Online broker eToro has published a warning notice to traders regarding the possibility of increased market volatility as the U.S. election is set for a tight finish.
The broker noted:
“The market could be very volatile, so keep a close eye on your trades and set stop-loss/take-profit levels. Be aware that extreme conditions may trigger circuit breakers and cause changes in market spreads”.
eToro has its own internal circuit breakers that are active across all asset classes. When eToro identifies extreme volatility on an asset, the circuit breakers might go into effect and temporarily disable the ability to open/close positions.
eToro also has safety mechanisms in place. They are called circuit breakers, as they are emergency measures used to halt trading in unusual cases. On eToro, they are prompted by these occurrences:
Whenever a spread is over widened a circuit breaker is triggered. This means that whenever a difference between the ask prices and the bid of an asset is too big, or over-spread, there’s cause for a trading halt.
Technical issues can also trigger safety breakers.
