S&P 500 Falls 3.8% as Markets Eye Circuit Breaker Trigger Levels
Summary
- A sharp selloff in U.S. stocks is drawing attention to circuit breaker trigger levels tied to the S&P 500.
- Tiered trading halts are imposed when the S&P 500 falls 7%, 13% or 20% from the previous session’s close.
- Reaching 7,150.41 for Level 1, 6,689.09 for Level 2 and 6,150.89 for Level 3 would trigger either a 15-minute halt or an end to trading for the day.
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A sharp selloff in U.S. stocks is drawing attention to the thresholds for marketwide circuit breakers that temporarily halt trading. The S&P 500 was down 3.8%.
Walter Bloomberg reported on November 5 that under U.S. stock market circuit breaker rules, tiered trading halts are triggered when the S&P 500 falls 7%, 13% or 20% from the previous session’s close.
The Level 1 threshold is 7,150.41, equivalent to a 7% drop from the prior close. If the index reaches that level, trading is halted for 15 minutes.
The Level 2 threshold is 6,689.09, triggering another 15-minute halt if the index falls 13%. If the S&P 500 drops to 6,150.89, the Level 3 threshold, for a 20% decline, trading for the day is ended.
Trading halts tied to 7% and 13% declines apply only before 3:25 p.m. Eastern time. The 20% threshold that ends trading for the day applies throughout the full session.
JH Kim
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