Trading Halts and Circuit Breakers
Chapters in this video
- 0:00 Regulatory trading halts: three reasons for single-stock pauses
- 0:52 LULD and the rolling five-minute reference price trap
- 2:17 LULD tier bands and the doubled-bands quirk near close
- 3:22 The three-step LULD halt mechanics
- 3:50 Market-wide circuit breakers: S&P 500 trigger levels
- 5:09 The 3:25 PM cutoff exam trap
- 6:02 MWCB versus LULD side-by-side comparison
- 6:31 Rapid-fire exam recap
What this video covers
- The three reasons an exchange or Financial Industry Regulatory Authority (FINRA) will impose a regulatory trading halt on a single security
- Why the LULD reference price is the rolling five-minute average, not the opening price, and how that distinction shows up as a bait answer
- The LULD tier structure: Tier 1 (5% band for S&P 500, Russell 1000, and select exchange-traded products), Tier 2 (10% band for all other National Market System securities), and the doubled bands in the last 25 minutes
- The three-step LULD mechanical flow: price band hit, 15-second limit state, then five-minute trading pause if unresolved
- The MWCB trigger levels (7%, 13%, 20%) and why each Level 1 and Level 2 halt can fire only once per day
- The 3:25 PM Eastern Time cutoff for Level 1 and Level 2 halts, and why Level 3 halts at any time
- How to distinguish a market-wide circuit breaker scenario (S&P 500 decline) from a single-security LULD scenario on the exam
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