David Waring

As it looks like the US Stock Markets are set for another large selloff on the open, I thought it would be prudent to post about the circuit breaker rules that are in place in the US Markets to try and halt panic selling.

From the Associated Press Article Below:

Stocks head for sharp decline on recession fears: Financial News - Yahoo! Finance

The thresholds that would trigger a halt in trading are set at a decline of 10 percent, 20 percent and 30 percent in the Dow, based on where that index was at the beginning of the current quarter; that would mean declines of 1,100 points, 2,200 points and 3,300 points, respectively.If the Dow Jones industrial average falls 1,100 points before 2 p.m., the market will shut down for an hour. If the threshold is breached between 2 p.m. and 2:30 p.m., the halt will last 30 minutes. Trading would stop again if the Dow falls by 2,200 points. If the Dow falls by 3,300 points at any time, trading would be halted for the day.


For Information on the futures trading limits which have been hit this morning please see the link below:


http://www.cmegroup.com/trading/equi...LimitGuide.pdf


Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.