A Price Floor is a regulatory or market-determined minimum price below which the price of a security, commodity, or currency is not permitted to fall. In equity markets, stock exchanges may impose temporary circuit breakers (lower circuits) that act as price floors during extreme sell-offs. In commodity markets, governments may set price floors to protect producers from unsustainably low prices. For investors, understanding price floors helps assess downside risk limits and the intervention mechanisms that may support asset prices during market stress.
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