What circuit breakers are and how they could halt markets Wednesday

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After the overnight plummet in U.S. stock index futures, investors are bracing for potential stock drops Wednesday that could trigger a trading halt.

Marketwide circuit breakers kick in when the S&P 500 falls 7 percent (Level 1), 13 percent (Level 2) and 20 percent (Level 3) from the previous day's close. The S&P closed up 8 points at 2,139.56 on Tuesday.

For Wednesday, Nov. 9, those marketwide circuit breaker levels are:

Level 1, around 1,989.79

Level 2, around 1,861.42

Level 3, around 1,711.65

A U.S. market decline that triggers a Level 1 or Level 2 circuit breaker from the market open at 9:30 a.m., EST, "up to and including" 3:25 p.m. will halt marketwide trading for 15 minutes.

A 20 percent intraday drop at any point in the trading session would trigger a Level 3 circuit breaker and stop market trading for the day.

Overnight Tuesday into Wednesday morning, Dow futures briefly fell 800 points, while S&P 500 and Nasdaq 100 futures temporarily fell more than 5 percent Tuesday night as Donald Trump's electoral vote count grew.

The decline in the S&P and Nasdaq futures was so large that CME said it would allow trade above that 5 percent low, but not below it, until the 9:30 a.m., EST, Wednesday market open.

If the major averages fall 5 percent during Wednesday's session, they could have their worst day since August 2011, after the S&P took away the U.S.' AAA rating. The day after the downgrade, Aug. 8, 2011, the Dow fell 5.55 percent and the S&P lost 6.66 percent.

The last time the Nasdaq fell more than 5 percent was on Aug. 18, 2011, when it dropped 5.22 percent.

Heading into the election, Wall Street had broadly positioned for continued gridlock in federal government, with a Hillary Clinton win and Republican control of at least the House of Representatives.

— CNBC's Robert Hum contributed to this report.