Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average. Circuit-breaker levels are set quarterly as 10, 20 and 30-percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
In second-quarter 2006, the 10-, 20- and 30-percent decline levels, respectively, in the DJIA will be as follows:
Level 1 Halt
A 1,100-point 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 2,250-point 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 3,350 -point drop will halt trading for the remainder of the day regardless of when the decline occurs.
Trading collars, which restrict index-arbitrage trading, will be triggered during second-quarter 2006 when the NYSE Composite Index® (NYA) moves 160 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 80 points.
In second-quarter 2006, trading collars will be implemented as follows:
A decline in the NYA of 160 points or more will require all index-arbitrage 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 80 points or less below its previous day’s close.
An advance in the NYA of 160 points or more will require all index-arbitrage 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 80 points or less above its previous day’s close.
The restrictions will be re-imposed each time the NYA advances or declines 160 points from its previous day’s close.
Background:
Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2006, those dates are Jan. 3, April 3, July 3 and Oct. 2.
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.
About NYSE Group, Inc.
NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.
The NYSE is the world’s largest and most liquid cash equities exchange. The NYSE provides a reliable, orderly, liquid and efficient marketplace where investors buy and sell listed companies’ common stock and other securities. Our listed operating companies represent a total global market capitalization of over $22.5 trillion. In January and February 2006, on an average trading day, over 1.8 billion shares, valued at over $69 billion, were traded on the NYSE.
NYSE Arca is the first open, all-electronic stock exchange in the United States and has a leading position in trading exchange-traded funds and exchange-listed securities. NYSE Arca is also an exchange for trading equity options. NYSE Arca’s trading platform links traders to multiple U.S. market centers and provide customers with fast electronic execution and open, direct and anonymous market access.
NYSE Regulation, an independent not-for-profit subsidiary, regulates member organizations through the enforcement of marketplace rules and federal securities laws. NYSE Regulation also ensures that companies listed on the NYSE and NYSE Arca meet their financial and corporate governance listing standards.
For more information on NYSE Group, go to: www.nyse.com. Information contained on our website does not constitute a part of the prospectus relating to any offering of NYSE Group, Inc. securities.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on NYSE Group’s current expectations and involve risks and uncertainties that could cause NYSE Group’s actual results to differ materially from those set forth in the statements. There can be no assurance that such expectations will prove to be correct. Actual results may differ materially from those expressed or implied in the forward-looking statements. Factors that could cause NYSE Group’s results to differ materially from current expectations include, but are not limited to: NYSE Group’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Group’s Registration Statement on Form S-4 and periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Group that the projections will prove to be correct. We undertake no obligation to release any revisions to any forward-looking statements.