LULD and Market-Wide Circuit Breakers
Chapters in this video
- 0:00 LULD as the market's automated speed bump
- 2:03 Tier 1 versus Tier 2 band widths and doubling trap
- 4:05 Trading halts versus LULD pauses: the spike strip analogy
- 4:28 MWCB levels, the prior close reference, and the 3:25 cutoff
- 6:17 The halt-trading prohibition: quotes and IOIs are violations too
- 7:09 Rapid-fire exam recap
What this video covers
- The LULD 15-second test: what happens when a stock hits its band edge, and why the 15-second period triggers the pause rather than the pause itself
- The tier 1 and tier 2 LULD band widths (5% versus 10%), and the exact condition when tier 1 doubles to 10% only in the last 25 minutes with no opening-period doubling
- Why the reopening auction after a LULD pause always occurs at the primary listing market, not at the venue where the pause triggered
- The distinction between a LULD pause (pricing restriction inside a band) and a full trading halt (complete suspension of quotes and trades)
- The three market-wide circuit breaker (MWCB) levels: 7% Level 1, 13% Level 2, and 20% Level 3, each with their halt durations and the 3:25 p.m. ET cutoff restriction on Levels 1 and 2
- Why the MWCB percentage drops are calculated from the prior day's closing S&P 500 price, not from the current day's opening price or intraday high
- The halt-trading prohibition: why publishing a quote or indication of interest (IOI) during any halt is itself a violation, even if no trade executes
Read the full lesson, free
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