The stock market downside price limits during U.S. trading hours from 8:30 a.m. to 3:00 p.m. central time are successive lower price limits on the S&P 500 index in tiers based on being down over 7%, 13%, and then 20% with a decline below the previous trading day’s closing price as a reference point.

New York Stock Exchange circuit breaker rules:

If the S&P 500 falls 7%, trading will halt for 15 minutes.

If the S&P 500 falls 13%, trading will halt for 15 minutes.

If the S&P 500 falls 20%, trading will halt for the rest of the day.

For E-mini S&P 500 index futures (ES), the Micro E-mini S&P 500 (MES), and the S&P 500 (SP) futures, the price that is used as a reference is set at the previous trading day’s Volume-Weighted Average Price (VWAP) of the front month E-mini S&P 500 futures contract determined between 2:59:30 p.m. – 3:00 p.m. Central Time. The overnight futures market has set upside and downside limits of 5% during non-U.S. trading hours on stock index futures.

In after hours futures trading from 5:00 p.m. to 8:30 a.m. central time there is an upside and downside price limit of a maximum move of 5% in either direction. The midpoint of the 5% limit is based on the 3:00 p.m. CT futures fixing price. The width of the 5% limit is based on 5% of the S&P 500 Index value at 3:00 p.m.

The purpose of these limits is to stop a huge selloff and give some time out for traders and investors to calm nerves and fears and prevent an irrational crash. stock market circuit breaker

Photo by Tim Mossholder from Pexels

By Steve Burns

After a lifelong fascination with financial markets, Steve began investing in 1993 and trading his accounts in 1995. It was love at first trade. After more than 30 successful years in the markets, Steve now dedicates his time to helping traders improve their psychology and profitability. New Trader U offers an extensive blog resource with more than 4,000 original articles, online courses, and best-selling books covering various topics.