7% decline before 3:25pm ET
- 15-minute trading halt
13% decline before 3:25pm ET
- 15-minute trading halt
Is it 7 or 13 percent?
Also, what happens if there’s a decline after 3:25?
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It’s both. For example, let’s assume the market falls by 7% at 11am ET. This would trigger the first 15-minute halt. After the halt, the market reopens. Then, the market falls to a 13% decline at 1pm ET. This triggers the second 15-minute halt. The last possible halt will occur if the market goes down by 20%, which shuts the market down for the rest of the day.
If the market declines by 7% or 13% after 3:25pm ET, there is no halt implemented.
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So if the market falls by 7% after the first halt or 13% after the second halt, nothing happens?
Also, what happens if the first decline is 13%? Does that “bypass” the first tier halt? Or will the market be halted again if there’s another 13% decline?
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So if the market falls by 7% after the first halt or 13% after the second halt, nothing happens?
If the 7% and 13% declines happen before 3:25pm ET, then the markets are halted for 15 minutes (for each). If both occur after 3:25pm ET, then no halt is implemented.
Also, what happens if the first decline is 13%? Does that “bypass” the first tier halt? Or will the market be halted again if there’s another 13% decline?
I assume you’re referencing the market opening down 13% right at the bell. If so, I’m not quite sure what the approach would be. We’d likely see a simple 15-minute halt if that was the case. If it doesn’t happen right at market open, then 7% would have to come before 13%. Regardless, these are hypotheticals you will not encounter on the exam.
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