In: Finance
1. . Please describe the four times when S&P500 index hit its circuit breakers on March 9, 12, 16, and March 18.
Circuit Breaker is that level, when reached then trading gets halted in the entire market.
These levels are:-
Level 1 - 7%
Level 2 - 13%
Level 3 - 20%
These levels means that if the market drops dramatically by 7% or 13% or 20% as compared to the closing prices of the previous day then trading in the market will be halted.
So, on 9th, 12th and 16th of March, the level 1 i.e. 7% was triggered in the opening hour of the day i.e. there was a dramatic drop of 7% as compared to the close of previous day, so trading was halted for 15 minutes in the entire stock market.
On march 18th, the level 1 of 17% was triggered on the later part of the day but before 3:25 pm, so again trading was halted for 15 minutes.
All these triggers of circuit breaker levels is because of the global pandemic of Coronavirus.