Circuit Breaker

RECENT NEWS
Benzinga  Apr 18  Comment 
(c) 2012 Benzinga.com. All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.
Reuters  Apr 4  Comment 
(Adds White House not immediately available for comment, recasts lead)
Wall Street Journal  Mar 23  Comment 
Apple shares are trading back to normal after a pretty wild couple of minutes.
The Straits Times  Feb 12  Comment 
THE wild price swings of some penny counters last week, as they roared back to life after a five-year hiatus, have rekindled the debate on the need for measures to calm stock market volatility.
Benzinga  Feb 6  Comment 
(c) 2011 Benzinga.com. All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.
The Globe and Mail  Feb 2  Comment 
New IIROC rule requires five-minute halt
Benzinga  Jan 26  Comment 
(c) 2011 Benzinga.com. All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.
Benzinga  Jan 24  Comment 
(c) 2011 Benzinga.com. All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.
StreetInsider.com  Jan 17  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Ku6+%28KUTV%29+Shares+Haltd+on+Circuit+Breaker+Up+192%25+Following+Deal+with+YouTube/7085671.html for the full story.
Forbes  Dec 28  Comment 
Goldman Sachs has been forced to rethink its business model, with the investment bank coming under fire from regulators of late.




 
TOP CONTRIBUTORS

A circuit breaker, also known as a trading curb or collar, is a mechanism to restrict program trading on an exchange for a specified period of time when the market moves up or down by a large number of points during a trading day. This mechanism was put in place after program trading was blamed for the crash of 1987, also known as Black Monday. The ideas is that circuit breakers will limit market damage by restricting trading activities that might lead to greater volatility and encourage those that lead to greater stabilization. Although circuit breakers are triggered by upward movements in the market, in recent times, most have been triggered by downward market movements.

Example(s)

New York Stock Exchange

Circuit breaker restrictions on the New York Stock Exchange are updated quarterly to reflect the levels reached by the Dow Jones Industrial Average.
  • 10% or 1,100 point decline: The first circuit breaker is triggered if the Dow Jones Industrial Average declines by approximately 10%. Subsequent restrictions, if any, depend on the time of day when the circuit breaker is triggered. If the trigger occurs before 14.00 hrs (EST), trading is halted for 1 hour. If the trigger occurs between 14.00 and 14.30 hrs (EST), trading is halted for 30 minutes. If the trigger occurs after 14.30 hrs (EST), no restrictions are put into place. There are no similar restrictions in place for a 10% rally in the Dow Jones Industrial Average.[1]
  • 20% or 2,200 point decline: The second circuit breaker is triggered if the Dow Jones Industrial Average declines by approximately 20%. Subsequent restrications, again, depend on the time of day when the circuit breaker is triggered. If the trigger occurs before 13.00 hrs (EST), trading is halted for 2 hours. If the trigger occurs between 13.00 and 14.00 hrs (EST), trading is halted for 1 hour. If the trigger occurs after 14.00 hrs (EST), trading is ended for the day. There are no similar restrictions in place for a 20% rally in the Dow Jones Industrial Average.[1]
  • 30% or 3,350 points decline: The third circuit breaker is triggered if the Dow Jones Industrial Average declines by approximately 30%. Under these circumstances, the New York Stock Exchange closes early that day. There are no similar restrictions in place for a 30% rally in the Dow Jones Industrial Average.[1]

References

  1. 1.0 1.1 1.2 NYSE Announces Fourth-Quarter 2008 Circuit-Breaker Levels, New York Stock Exchange
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki