Anyhoo,
...When in doubt, go with the most hysterical headline.
(Rule one of blogging is that the End Of The World will be good for page views.)
-Joel Achenbacher
The Washington Post
From the New York Stock Exchange:The Washington Post
...In 2012, in connection with its approval of the Regulation NMS Plan to Address Extraordinary Market Volatility, commonly referred to as the Limit Up – Limit Down Plan, the SEC approved amendments to Rule 80B (Trading Halts Due to Extraordinary Market Volatility) that revise the halt provisions and circuit-breaker levels. Amended Rule 80B is operative during the pilot period of the Limit Up – Limit Down Plan.This cheery line of thought was last explored in 2011, before the 2013 amendments so I figured an update would be in order.
Rule 80B
Effective April 8, 2013, amended Rule 80B will be in effect. Amended Rule 80B replaces:
Amended Rule 80B also modifies:
- the DJIA with the S&P 500 as the benchmark index for measuring a market decline;
- the quarterly calendar recalculation of Rule 80B triggers with daily recalculations; and
- the 10%, 20%, and 30% market decline percentages with 7%, 13%, and 20% market decline percentages.
Specifically, the circuit-breaker halt for a Level 1 (7%) or Level 2 (13%) decline occurring after 9:30 a.m. Eastern and up to and including 3:25 p.m. Eastern, or in the case of an early scheduled close, 12:25 p.m. Eastern, would result in a trading halt in all stocks for 15 minutes. If the market declined by 20%, triggering a Level 3 circuit-breaker, at any time, trading would be halted for the remainder of the day.
- the length of the trading halts associated with each market decline level; and
- the times when a trading halt may be triggered.
A Level 1 or Level 2 halt can only occur once per trading day. For example, if a Level 1 Market Decline was to occur and trading was halted, following the reopening of trading, the NYSE would not halt the market again unless a Level 2 Market Decline was to occur. Likewise, following the reopening of trading after a Level 2 Market Decline, the NYSE would not halt trading again unless a Level 3 Market Decline were to occur, at which point, trading in all stocks would be halted until the primary market opens the next trading day.
We are not calling for a 20% decline in the broad index.