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Vanguard - Market circuit breakers
Personal Investors

Market volatility regulations

Circuit breakers
Circuit-breaker points represent the thresholds at which trading is halted market-wide for single-day declines in the S&P 500 Index. Circuit breakers halt trading on the nation's stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day. The circuit breakers are calculated daily.

Level 1 halt (7%)

  • Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
  • At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.

Level 2 halt (13%)

  • Trading will halt for 15 minutes if drop occurs before 3:25 p.m.
  • At or after 3:25 p.m.—trading shall continue, unless there is a Level 3 halt.

Level 3 halt (20%)

  • At any time during the trading day—trading shall halt for the remainder of the trading day.

Single stock price bands
The SEC implemented a new marketplace rule, known as the Limit Up-Limit Down Rule, designed to prevent trades from executing outside of price bands established throughout the day for individual stocks and exchange-traded funds (ETFs).

 

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