During a disastrous trading day on the NYSE, the DJIA is down by 21% (a Level 2 decline) at 2:30 ...

By Investopedia Staff AAA
Q:

During a disastrous trading day on the NYSE, the DJIA is down by 21% (a Level 2 decline) at 2:30 in the afternoon.  NYSE Rule 80B mandates which of the following trading halts?

a) Halt trading for 30 minutes
b) Halt trading for 1 hour
c) Halt trading for 2 hours
d) Close the market for the day
A:

The correct answer is d.
A Level 2 decline (20% -30%) after 2pm requires closing the market for the rest of the day. There are several levels of halts, depending on the severity of market decline. Rule 80B uses the DJIA (Dow Jones Industrial Average) as the standard for triggering trading halts.


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