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ICE to add circuit breakers to European futures
March 20, 2012 / 7:27 PM / 6 years ago

ICE to add circuit breakers to European futures

NEW YORK, March 20 (Reuters) - IntercontinentalExchange Inc said on Tuesday it would introduce circuit breakers for certain ICE Futures Europe contracts, including Brent crude futures, to cut down on the likelihood of extreme market volatility.

The Atlanta-based exchange operator rolled out circuit breakers, or interval price limits (IPLs), last week for U.S. Dollar Index futures contracts and certain Russell Index futures contracts, aimed at preventing price spikes that are often associated with high-speed electronic trading.

IPLs set upper and lower limits for given markets within specific timeframes. Prices that move beyond those set amounts trip the circuit breaker, putting the market on hold for a pre-determined amount of time, giving participants a chance to decide if the move was warranted.

During the hold period, the affected futures contract can still be traded, but only within the IPL range. When the contract begins trading again, a new IPL range is set after the hold, based on the price at the end of the hold.

ICE Futures Europe said IPLs for EUA Futures, EUA Futures, ERU Futures, EUAA Futures, EUAA Futures, and Dutch TTF Futures, would be effective beginning March 26.

It said IPLs for Brent Futures, Brent NX Futures, Gasoil Futures, Low Sulphur Gasoil Futures, WTI Futures, Rbob Futures, and Heating Oil Futures, would be effective April 1.

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