Sentiment fiasco has caused the panic selling around Asia on 24 Oct 2008, which in turn triggered Dow Futures plunging to maximum amount allowed, ie. Limit Down, prior to the opening bell of Dow Cash Market.
The big drop in futures trading of 550 points raised the possibility that circuit breakers intended to prevent panic selling could be triggered during regular trading -- something that hasn't happened since 1997.
The thresholds that would trigger a halt in trading are set at a decline of 10 percent, 20 percent and 30 percent in the Dow, based on where that index was at the beginning of the current quarter; that would mean declines of 1,100 points, 2,200 points and 3,300 points, respectively.
If the Dow Jones industrial average falls 1,100 points before 2 p.m., the market will shut down for an hour. If the threshold is breached between 2 p.m. and 2:30 p.m., the halt will last 30 minutes. Trading would stop again if the Dow falls by 2,200 points. If the Dow falls by 3,300 points at any time, trading would be halted for the day.
Friday, October 24, 2008
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