Circuit Breakers

Topics: Futures contract, Hong Kong Stock Exchange, Stock market Pages: 2 (521 words) Published: May 13, 2013
South Korea Stock Exchange

Circuit Breakers (Sidecar) 
Cash Market
* Trading suspended in case KOSPI decreases continuously for 1 minute more than 10% of closing price of the very preceding day. * Suspension is made for 20 minutes.
* During suspension, however, it is not possible make a new offer but possible to cancel offer submitted prior to suspension. * The KRX resumes trading 20 minutes after issue of circuit breakers. * Circuit breakers shall be exerted not in case of increase but in case slump only. Circuit breakers are triggered only once a day and are not triggered after 2:20 pm (40 minutes before market closing) * It has been exerted 3 times (2000.4/17/2000, 9/18/2000, 9/12/2001) since its introduction in December 1998.  

Future market
Also if KOSPI 200 futures falls +- 5% for 1 minute then program trades are stopped for 5mins but everything else trades normally. 

Price Limits
* Price limits set a maximum percentage or value that a security or derivative contract could rise or fall during a trading day. Price limits are common features of commodity futures contracts traded in the US since 925. Over time, they have been adopted on financial futures contracts as well. Unlike circuit breakers, price limits are not a trading halt per se, since they do not create a timeout from the trading process. Trading can continue immediately if buyers and sellers agree to a price within the limit bounds.  * At the Korea Stock Exchange, the allowable daily trading band for share price fluctuation is 15%.

Hong Kong stock Exchange
Hong Kong Exchanges and Clearing Limited (HKEx) does not impose any circuit breaker or price limit on its Markets. The Hong Kong Futures Exchange removed the maximum fluctuation limit imposed on the Hang Seng Index and sub-index futures and options contracts in late 1997 in the belief that the global trend was to let market forces determine the direction of markets. As an international financial centre,...
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