European Exchanges Curb Trading Amid Wild Moves

By Anna Isaac

European exchanges on Monday deployed trading curbs to prevent disorderly markets on one of the most turbulent days since the aftermath of the Brexit vote.

Unlike their U.S. counterparts, major exchanges in Europe don't have automatic trading suspensions for indexes if they rise or fall by certain levels. These suspensions in trading, known as circuit breakers, hit the U.S. on Monday, as the S&P 500 and Dow Jones Industrial Average dropped sharply at the open.

Rather than a blanket calculation, securities listed at the London Stock Exchange Group PLC, which hosts the FTSE 100, and Deutsche Boerse AG's Xetra, which calculates the pricing for the German Dax index, measure swings on individual securities. It temporarily slows markets by moving to less fast-paced auctions rather than live trading when certain measures of volatility are hit.

In the first three hours of the trading Monday in Germany, there were 1,300 "extended volatility interruptions" on the Xetra trading platform. This was unusually high compared with normal operations and surpassed that of June 24, 2016--the day after the Brexit referendum--in which there were 1,198 interruptions throughout the entire day's trading.

On the FTSE 100, the LSE implemented 78 "price monitoring extensions," which slow down trading of certain stocks to allow traders longer to consider their positions. This was a similar level to the immediate aftermath of the Brexit vote.

Write to Anna Isaac at [e-mail]

(END) Dow Jones Newswires

March 09, 2020 11:33 ET (15:33 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.