Wed, 9/28/11 11:53 AM – New Circuit Breakers for All US Stock Markets

New circuit breakers were announced yesterday that will apply to all US exchanges, including electronic exchanges. This was because the old ones triggering at 10%, 20%, 30% had not triggered in the last 20 years.

Here are the new circuit breakers for stock markets. If the stock market, not an individual stock, is down:
7% – 15 minute halt to trading
13% – additional 15 minute halt
20% – no more trading for the day

Note that the 7% and 13% triggers do not apply after 3:25 PM EST. Only the 20% decline halts trading during the last 35 minutes of the day.

According to Bob Pisani at CNBC, changes to circuit breakers for individual stocks are also being considered, similar to the limits in the commodities markets where trading continues but trades below the trigger price level are not allowed. So, if a 10% limit is approved, then if a $50 stock dropped 10% on the day no trade could be executed for less than $45.

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