The New York Stock Exchange (NYSE) has announced the implementation plans for its new circuit-breaker collar trigger levels for second quarter 2008, effective 1 April.
Circuit-breaker points represent the thresholds at which trading is halted market wide for single day declines in the Dow Jones Industrial Average (DJIA). The levels are set quarterly as 10, 20 and 30% of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
In second quarter 2008, the 10, 20 and 30%t decline levels, respectively, in the DJIA will be as follows:-
• Level 1 halt:
A 1,200-point drop in the DJIA before 2pm will halt trading for one hour; for 30 minutes if between 2 pm and 2:30 pm; and have no effect if at 2:30 pm or later unless there is a level 2 halt.
• Level 2 halt: A 2,450-point drop in the DJIA before 1pm will halt trading for two hours; for one hour if between 1pm and 2pm; and for the remainder of the day if at 2pm or later.
• Level 3 halt:
A 3,650-point drop will halt trading for the remainder of the day regardless of when the decline occurs.