Rule 80B

Rule 80B

A New York Stock Exchange rule that restricts trading for specified periods in the event the Dow Jones Industrial Average experiences one of three specified percentage declines. See also circuit breaker.

Case Study New York Stock Exchange Rule 80B is a circuit breaker designed to limit panic selling during serious market declines and extreme volatility. The rule provides for brief trading halts during a severe market decline as measured by a single-day decrease in the Dow Jones Industrial Average. Circuit breakers on the NYSE are currently in effect for three thresholds: 10%, 20%, and 30% declines in the Dow.

10% decline in the Dow
1. One-hour trading halt if the decline occurs prior to 2 p.m.
2. Half-hour trading halt if the decline occurs between 2 and 2:30 p.m.
3. No trading halt if the decline occurs after 2:30 p.m.

20% decline in the Dow
1. Two-hour trading halt if the decline occurs prior to 1 p.m.
2. One-hour trading halt if the decline occurs between 1 and 2 p.m.
3. The market closes if the decline occurs after 2 p.m.

30% decline in the Dow
1. The market closes for the day regardless of the time.