Stock Market Circuit Breakers Halt Trading To Avoid COVID-19 Crash

Today stocks fell significantly today at a rapid pace, causing certain "circuit breakers" to activate. As the S&P fell more than 7% after the starting bell. This is "limit down", the first of the day, that starting trading below the set level for 15 minutes. Trading resumed at 9:49 am ET, and it was clear that fears of oil barrel prices falling and reaction to coronavirus (COVID-19) continued to spread.

"The market circuit breakers are designed to slow trading down for a few minutes, give investors the ability to understand what's happening in the market, consume the information and make decisions based on market condition," said New York Stock Exchange President Stacey Cunningham in a brief interview with CNBC this morning. "This is operating as it's supposed to."

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There are three S&P 500 "circuit breaker thresholds" in which market trading will halt. Level 1 was activated earlier this morning.

– Level 1: S&P 500 declines 7%, trading will pause for 15 minutes, and the potential for Level 2 activates.

– Level 2: S&P 500 must decline 13%, trading will pause for 15 minutes. This will occur if the drop happens on or before 3:25 p.m. ET. – Only IF that happens, Level 3 could activate.

– Level 3: S&P 500 falls further 20%, trading halted for the remainder of the day.

This latest set of circuit breakers were put in place in February of 2013. These relatively new breakers had not been activated at any level before today.

Take a peek at the timeline below for more information on the stock market's drop and related information. It's about COVID-19, it's about fear, it's about fallout. While individual drops for companies could have to do with their completely non-related business practices and performance, most of what we're seeing this week (and the last couple of weeks) has to do with COVID-19 and – in today's case – Saudi Arabia's slashing of prices for oil.