October 24, 2008 / 1:04 PM / 11 years ago

FACTBOX: Stock circuit breakers/futures limit-downs

NEW YORK (Reuters) - Stock index futures tumbled so sharply on Friday they had to be frozen at several points as global markets plunged on signs 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 by the CME Group.

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 Industrials 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 steamrolled 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 the market’s downdrafts.

Level 1 Halt

A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; 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 DJIA before 1:00 p.m. 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 the decline occurs.

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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 the 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 the 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 the 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.

Sources: NYSE, Nasdaq and CME Group

Reporting by Ellis Mnyandu

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