With stock futures looking set to open sharply lower, investors will be watching for key market circuit breakers known as 'limit down' which have the ability to limit or halt the market altogether.
With stock futures looking set to open sharply lower, investors will be watching for key market circuit breakers known as 'limit down' which have the ability to limit or halt trading on the market.
Limit down occurred on Sunday evening after S&P 500 futures sank 5%, halting trading below limit down and preventing futures from falling any further. Traders work the floor of the New York Stock Exchange on March 5, 2020 in New York City. Coronavirus fears have whipsawed markets recently, with the Dow Jones Industrial Average ending today down more than 950 points, or nearly 3.6 percent. , investors will be watching for key market circuit breakers known as 'limit down' which have the ability to limit or halt the market altogether.
Limit down occurred on Sunday evening after S&P 500 futures sank 5%, halting trading below limit down and preventing futures from falling any further., a market trading halt may occur at "three circuit breaker thresholds" on the S&P 500 due to large declines and volatility. The exchange classifies this at three levels based on the preceding session's close in the S&P 500.Level 1: If the S&P 500 drops 7%, trading will pause for 15 minutes. .
Level 2: If the S&P 500 declines 13%, trading will again pause for 15 minutes if the drop occurs on or before 3:25 p.m. ET. There will be no halt the drop happens after that. .These circuit breakers have never been triggered in their current form during regular trading hours. The prior circuit breaker system was revamped after it failed to prevent the May 2010 flash crash. This current set of breakers were put into effect in February 2013.
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