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What Is the Concept of a “Circuit Breaker” in the Context of CEX Price Feeds?

Extreme Volatility $Rightarrow$ Trading Halt (Automated Risk Mitigation)
Greeks.Live20.11.25

What Is the Concept of a “Circuit Breaker” in the Context of CEX Price Feeds?

A circuit breaker is an automated mechanism that halts trading or suspends price updates if the price of an asset moves too quickly or exceeds a predefined volatility threshold. CEXs use this to prevent market crashes or to stop trading during periods of extreme manipulation.

While it protects the CEX, it can cause a "stale price" issue for a DeFi oracle relying on that CEX's feed.

What Is a ‘Circuit Breaker’ and How Is It Designed to Prevent Flash Crashes?
How Do “Circuit Breakers” Function to Limit Extreme Volatility and Slippage?
What Is the Purpose of an Exchange’s “Circuit Breaker” Mechanism during Extreme Order Flow?
What Is the Term for the Maximum Allowable Price Fluctuation in a Trading Day?

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