Wall Street's emergency mechanism for Black Monday 2.0
2026-10-18 18:18:16
CoinMeta data: Coin Bureau mentions that in the event of a Black Monday 2.0, Wall Street has three emergency mechanisms: 1. All U.S. stock trading is suspended for 15 minutes before the S&P 500 index falls by 7%; 2. Trading is suspended again for 15 minutes before it falls by 13%; 3. Trading stops for the rest of the day whenever it falls by 20%. In addition, there is a 7% limit on price fluctuations for S&P 500 futures during overnight trading. This is different from Black Monday in 1987, when such mechanisms did not exist. On October 19, 1987, the Dow Jones index plummeted by 22.6%, the S&P 500 fell by 20.5%, and NASDAQ fell by 11.4%, resulting in a loss of about $500 billion in market value. When the Hong Kong stock market reopened after being closed for 4 days, the Hang Seng Index tumbled by 33%. Wall Street introduced circuit breakers in 1988; the first time they were triggered was in 1997, and the rules were tightened in 2013. In March 2020, circuit breakers were triggered 4 times within 8 trading days. Nowadays, stocks are traded 24/7 on crypto exchanges, both as tokens and for leveraged betting, and there are no circuit breaker mechanisms in place. Last Saturday, when the U.S. markets closed, leveraged chip stock bets worth $51.6 million were liquidated within 10 minutes.
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