How U.S. market circuit breakers would work in a major sell-off

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How bad would a U.S. stock market plunge have to get before trading would be halted?

Seriously bad, based on the current parameters of the New York Stock Exchange’s circuit breakers.

The Dow Jones industrial average would have to fall 1,200 points, or about 10.5% based on Friday’s closing level of 11,444, to trigger a one-hour trading halt across the markets.

That’s assuming the decline comes before 2 p.m. EDT. If the Dow were to fall by that amount between 2 p.m. and 2:30 p.m. EDT, it would trigger a trading halt of 30 minutes.

After 2:30 p.m., no trading halt could be triggered unless the Dow were to fall 2,400 points, or about 21% from Friday’s level.

U.S. markets also now have circuit breakers in place for individual stocks. Go here for the details.

-- Tom Petruno

Here’s an NYSE graphic explaining the circuit breakers for the market as a whole: