Market-Wide Circuit Breakers

What this video covers

• The exact S&P 500 decline thresholds that trigger Level 1 (7%), Level 2 (13%), and Level 3 (20%) market-wide halts, and how each level is calculated from the prior day's closing price
• Why Level 1 and Level 2 halts last 15 minutes but only trigger once per day at each level, and what happens if the market drops, recovers, and drops again
• The 3:25 PM Eastern Time cutoff that eliminates Level 1 and Level 2 halts entirely, while Level 3 closes the market regardless of time
• How Limit Up-Limit Down (LULD) uses a 5-minute reference price, a 15-second grace period, and a 5-minute trading pause to address extreme moves in individual National Market System (NMS) stocks
• Why Tier 1 stocks (S&P 500, Russell 1000, select exchange-traded products (ETPs)) carry a 5% band while Tier 2 stocks carry a 10% band, and when those bands double
• The directional distinction: market-wide circuit breakers only halt on declines, while LULD triggers on both upward and downward moves
• How to dissect layered exam scenarios where a broad market decline and an individual stock price move occur simultaneously, applying the correct rule set to each