We wanted to give you a brief snapshot of how futures work in "limit down" mode pre-market and thereupon give you a quick hit on how the actual stock market circuit breakers work.  nowadays we may actually see the circuit breakers come into play after the stock market opens for trading.

DJIA futures are down 550 points, S&P Futures are halted at -60 points at 855.20, and NASDAQ at -85 points at 1168.50.  These levels can extend to -10% after the open before circuit breakers come back into play.  The way that works is that the futures can reopen whether the bids magically come back and the markets would rise, but otherwise futures are halted until the stock market open.  after -10% is reached in futures there is a 2 minute halt, soon after the limit is extended to allow for -20% with a halt for 2 minutes, and soon after the limit is extended to 30% down.

Here

are the CIRCUIT BREAKERS FOR THE DJIA after the market opens:

• Level 1 Halt: a 1,100-point drop in the DJIA before 2 p.m. will
  halt trading for one hour; for 30 minutes whether within 2 p.m. and 2:30
  p.m.; and have no effect whether at 2:30 p.m. or later unless there is a
  level 2 halt.
• Level 2 Halt: a 2,200-point drop in the DJIA before 1:00 p.m. will
  halt trading for two hours; for one hour whether amoung 1:00 p.m. and 2:00
  p.m.; and for the rest of the day whether at 2:00 p.m. or later.
• Level 3 Halt: a 3,350-point drop will halt trading for the rest of the day regardless of when the decline occurs.

Jon C. Ogg
October 24, 2008