NYSE Announces Q4 Circuit-Breakers

From the news releases at NYSE Euronext, the NYSE announces the Q4 circuit-breaker levels.  The circuit breakers kick in if the markets are experiencing huge selloff events. For over a decade now, the trigger for the three halt levels for the the Dow Jones Industrial Average (Dow) were 10%, 20% and 30% declines in one day.  The levels are set for the new quarter by using the closing numbers of the previous month, rounding off to the nearest 50 point level.

The limits appear far removed from recent events, such as the flash crash in May 2010, so securities regulators proposed lower percentages to facilitate more orderly markets in the event of a sharp selloff. Reference NYSE Euronext for more information.

For Q4, trading is halted for one hour if the Dow drops 1100 points before 2 PM. If the drop occurs between 2 and 2:30 PM, the halt is one-half hour.

For the next serious second halt level, trading is halted for two hours if the Dow drops 2250 points before 1 PM. Trading is halted for the remainder of the day if this point drop occurs after 2 PM.

For the most serious third halt level, trading is halted for the remainder of the day if the Dow drops at any time over 3,350 points.