FACTBOX: U.S. stock circuit breakers/futures limit-downs
NEW YORK (Reuters) - U.S. stock index futures tumbled so sharply on Friday they had to be frozen at several points as global markets plunged on fears the global economy is in the throes of recession.
Below are details of circuit-breaker levels for the New York Stock Exchange and Nasdaq, and limit-down thresholds for U.S. stock index futures set by the CME Group.
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NYSE CIRCUIT BREAKER LEVELS/NASDAQ
These are thresholds at which trading on both the NYSE and Nasdaq is halted marketwide based on single-day declines in the Dow Jones industrial average.
An NYSE circuit-breaker halt was last triggered on October 27, 1997 during a wide-scale market plunge triggered by a financial crisis in Asia.
In unprecedented action, trading was halted twice back then as the sell-off crashed through NYSE circuit breakers, first when the Dow was down 350 points and later as it fell 550 points. They were adopted under measures taken after the 1987 crash, aimed to slow market downdrafts.
Level 1 Halt
An 1,100-point drop in the Dow Jones industrial average before 2 p.m. (1800 GMT) will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m. (1830 GMT); and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
Level 2 Halt
A 2,200-point drop in the Dow before 1:00 p.m. (1700 GMT) will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
Level 3 Halt
A 3,350-point drop will halt trading for the day regardless of when it happens.
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CME GROUP'S U.S. EQUITY INDEX FUTURES DAILY PRICE LIMITS
ARE EFFECTED AS FOLLOWS:
S&P 500:
-- When there is a 5 percent drop or a 60-point slide in S&P 500 stock index futures prior to the opening of regular trading the limit-down threshold kicks in.
DJIA
-- When there is a 5 percent drop or a 550-point slide in Dow Jones industrial stock index futures prior to the opening of regular trading the limit-down threshold kicks in.
NASDAQ 100
-- When there is a 5 percent drop or an 85-point slide in Nasdaq 100 stock index futures prior to the opening of regular trading the limit-down threshold kicks in.
NOTE: Once regular trading commences, the next applicable trading limit shall be in effect. Additionally, if there is a halt declared on the primary securities market or the NYSE, trading will halt in all domestic stock index futures and options, whether a limit has been hit or not.
Trading will resume in CME Group domestic stock index contracts when the primary securities market reopens for trading. Once CME Group markets have reopened, the next applicable limit will be in effect.
The subsequent limits are at 10 percent down, 20 percent down, 30 percent down.
Sources: NYSE, Nasdaq and CME Group
(Reporting by Ellis Mnyandu; Editing by James Dalgleish)
