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S&P 500 Level Thresholds for Market-Wide Circuit Breakers on March 16

Futures Indicate Market-Wide Circuit Breakers Could Halt Trading

Graphic concept of the S&P 500 (^SPX) trading down in the red for losses. (Photo: AdobeStock)

At 7:30 AM EST, S&P 500 (^SPX) futures pressed down the limit — 5% for off-hours trading — where they had been for most of the overnight session. The level thresholds to trigger market-wide circuit breakers (MWCB) for the index are as follows for March 16, 2020:

  • Level 1 = 2521.24 (7%)
  • Level 2 = 2358.58 (13%)
  • Level 3 = 2168.81 (20%)

Market-wide circuit breakers (MWCB) are important, automatic mechanisms invoked if markets experience extreme broad-based declines. Last week, trading was halted not once but twice on oil price collapse and coronavirus fears.

They are designed to slow the effects of extreme price movement through coordinated trading halts across securities markets when severe price declines reach levels that may exhaust market liquidity.

(i) If a Level 1 Market or a Level 2 decline occurs after 9:30 AM EST and up to and including 3:25 PM EST, the New York Stock Exchange (NYSE) shall halt trading in all stocks for 15 minutes. Trading shall be halted based on a Level 1 or Level 2 decline only once per trading day.

The Exchange will not halt trading if a Level 1 or a Level 2 decline occurs after 3:25 PM EST.

(ii) If a Level 3 decline occurs at any time during the trading day, the Exchange shall halt trading in all stocks until the primary listing market opens the next trading day.

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PPD Business Staff

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