Binance Launches Pre-Market Circuit Breaker to Tame Volatility

Binance, the world's largest cryptocurrency exchange by trading volume, has introduced a novel mechanism to enhance user trading experience and mitigate market volatility. The Pre-Market Upward Circuit Breaker, launched on February 25th, is designed to limit the highest trading price of a stock within 72 hours before the market opens.

The Upper Price Limit Circuit Breaker mechanism operates by setting a maximum allowable price limit for a stock, which is a certain percentage of the initial opening price. This limit is in effect for 72 hours before the market opens, after which the trading price is no longer restricted and returns to normal trading.

To illustrate the mechanism, let's consider the example of RED, a stock that is about to be listed. The maximum holding limit per user is set at 5,000 RED. The Upper Price Limit Circuit Breaker rules for RED are as follows:

• From 2025-02-28 10:00 (UTC) to 2025-03-01 09:59 (UTC), the maximum allowable price limit is 200% of the initial opening price.
• From 2025-03-01 10:00 (UTC) to 2025-03-02 09:59 (UTC), the maximum allowable price limit is 300% of the initial opening price.
• From 2025-03-02 10:00 (UTC) to 2025-03-03 09:59 (UTC), the maximum allowable price limit is 400% of the initial opening price.
• From 2025-03-03 10:00 (UTC) onwards, there is no price limit in the pre-market.

This innovative approach by Binance aims to create a more stable and predictable trading environment for users, while also encouraging responsible trading practices. By implementing the Pre-Market Upward Circuit Breaker, Binance continues to demonstrate its commitment to enhancing user experience and fostering a healthy cryptocurrency market.