General Market-Wide Circuit Breaker Questions

Read frequently asked questions about market-wide circuit breakers.

1. What are the Market-Wide Circuit Breakers?

   The U.S. equities, options, and futures exchanges have established procedures for coordinated cross-market trading halts in equity-related products in the event of a severe market price decline. These procedures, known as MWCBs, halt trading temporarily or, under extreme circumstances, close the markets before the normal close of the trading session. MWCBs are triggered by a single day decrease in the S&P 500 Index through one of three well-defined halt levels.

2. What are the circuit breaker thresholds and general halt durations?

   The circuit breaker thresholds and general halt durations are as follows:

   • Level 1 halt (7% decline in S&P 500 index)
     • Trading will halt for a minimum of 15 minutes if the drop occurs before 3:25 p.m. ET.
     • At or after 3:25 p.m. ET, no Level 1 halt will occur.
   • Level 2 halt (13% decline in S&P 500 index)
     • Trading will halt for a minimum of 15 minutes if the drop occurs before 3:25 p.m. ET.
     • At or after 3:25 p.m. ET, no Level 2 halt will occur.
   • Level 3 halt (20% decline in S&P 500 index)
     • At any time during the trading day, trading will halt for the remainder of the trading day.

   Note: Each halt level can only be triggered once per day. For example, if the S&P 500 Index declines 7% at 10:00 a.m. ET and triggers a Level 1 halt, there will be no additional Level 1 halts even if the Index crosses the 7% boundary later during the same trading day following the resumption of trading from the initial Level 1 halt.

3. Who triggers the MWCB?

   The Securities Information Processors (SIPs) are responsible for monitoring the S&P 500 Index and triggering a MWCB halt. Messages will be published by the SIPs informing market participants of the event. The Primary Listing Exchanges are responsible for receiving the messages published by the SIPs and initiating individual halts in each of their listed securities.