Stats › Intraday and market microstructure › Circuit breaker clock
The market wide circuit breaker clock
Almost every explainer of US circuit breakers gives you three numbers, 7%, 13% and 20%, and stops. The numbers are the easy part. The part that decides what actually happens on a bad day is the clock, and that's where the write-ups go wrong.
Two rules do most of the work. A Level 1 or Level 2 halt can only happen between 09:30 and 15:25 New York time. After 15:25 the market keeps trading no matter how far it falls, unless it hits Level 3. And Level 3 closes the market at any hour of the session, with no reopening that day. So the last thirty five minutes of a crash has exactly one brake on it, and it is set at minus twenty percent.
The thresholds themselves and the full list of days they've fired are on the circuit breakers page already. This one is about the timing: the rule text, why 15:25 exists, and the four March 2020 triggers with the actual times of day, which turn out to be a story about the opening bell rather than the afternoon.
Under NYSE Rule 7.12 and Nasdaq Rule 4121, a Level 1 (-7%) or Level 2 (-13%) decline halts all US stocks for 15 minutes only if it happens after 09:30 and up to and including 15:25 New York time, and only once per trading day for each level. If either occurs after 15:25, trading simply continues. A Level 3 (-20%) decline at any time halts trading until the primary listing market opens the next trading day. All four March 2020 triggers were Level 1: 09:34:13 on the 9th, 09:35:44 on the 12th, 09:30:01 on the 16th and 12:56:17 on the 18th. Three of the four fired within six minutes of the open.
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