
NYSE Announces FirstQuarter 2007 CircuitBreaker and TradingCollar Levels
 
NEW YORK , Dec. 29, 2006  The New York Stock Exchange will implement new circuitbreaker and tradingcollar trigger levels for firstquarter 2007 effective Wednesday, Jan. 3, 2007.
Circuitbreaker points represent the thresholds at which trading is halted marketwide for singleday declines in the Dow Jones Industrial Average. Circuitbreaker levels are set quarterly as 10, 20 and 30percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
In firstquarter 2007, the 10, 20 and 30percent decline levels, respectively, in the DJIA will be as follows:
Level 1 Halt
A 1,250point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m. ; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
Level 2 Halt
A 2,500point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
Level 3 Halt
A 3,700point drop will halt trading for the remainder of the day regardless of when the decline occurs.
Trading collars, which restrict indexarbitrage trading, will be triggered during the firstquarter 2007 when the NYSE Composite Index® (NYA) moves 180 points or more above or below its closing value on the previous trading day, and will be removed when the NYA is above or below the prior day’s close by 90 points.
In firstquarter 2007, trading collars will be implemented as follows:
 A decline in the NYA of 180 points or more will require all indexarbitrage sell orders of the S&P 500 stocks to be stabilizing, or sell plus ^{[1]}, for the remainder of the day, unless on the same trading day, the NYA advances 90 points or less below its previous day’s close.
 An advance in the NYA of 180 points or more will require all indexarbitrage buy orders of the S&P 500 stocks to be stabilizing, or buy minus ^{[2]}, for the remainder of the day, unless the NYA retreats to 90 points or less above its previous day’s close.
 The restrictions will be reimposed each time the NYA advances or declines 180 points from its previous day’s close.
Background:
Circuitbreakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2007, those dates are Jan. 3, April 2, July 2 and Oct. 1.
Trading collars are also calculated quarterly, as 2 percent of the average closing value of the NYA for the last month of the previous quarter, rounded down to the nearest 10 points. They are removed when the NYA advances or retreats from the prior day’s close to less than or equal to half of the 2 percent value, rounded down to the nearest 10 points.
On Sept. 27, 2005 , the SEC approved the NYA for use as a benchmark for trading collars.
Please click on the following link for more information: http://www.nyse.com/press/1127817520991.html.
[1] A market order to sell “plus” is a market order to sell a stated amount of a stock provided that the price to be obtained is not lower than the last sale if the last sale was a “plus” or “zero plus” tick, and is not lower than the last sale plus the minimum fractional change in the stock if the last sale was a “minus” or “zero minus” tick. A limited price order to sell “plus” would have the additional restriction of stating the lowest price at which it could be executed.
[2] A buy “minus” is a market order to buy a stated amount of a stock provided that the price to be obtained is not higher than the last sale if the last sale was a “minus” or “zero minus” tick, and is not higher than the last sale minus the minimum fractional change in the stock if the last sale was a “plus” or “zero plus’ tick. A limited price order to buy “minus” would have the additional restriction of stating the highest price at which it could be executed.
