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A trading halt occurs in the
U.S The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
. when a
stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for the ...
stops trading on a specific security for a certain time period. The halt, which can happen a few times a day per security if
FINRA The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...
deems it, usually lasts for one hour, but is not limited to that. Trading halts can happen any time of day. The listed company is supposed to call the exchange where it is listed, 10 minutes prior to any material news that they are releasing, in order for the exchange to halt the stock before the news is released. The first 5 minutes of a halt is for "news pending" before any information is released that could affect a stock significantly, also known as the "5 minute window". Trading halts usually occur when a publicly traded company is going to release significant news about itself. The halt in trading for the affected security gives
investor An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Typ ...
s time to review the news and assess its impact. Another situation in which a trading halt might occur is when the exchange is uncertain "whether the security continues to meet the market’s listing standards." Note, there are also "trading pauses", which are defined as, under
NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
, "if a security is subject to a Trading Pause, the Pause Threshold Price field will contain the reference threshold price that deviates 10% from a print on the Consolidated Tape that is last sale eligible as compared to every print in that security on a rolling five (5) minute basis".


Regulatory and non-regulatory trading halts

Both of the reasons mentioned above are "regulatory" trading halts and are implemented on many major stock exchanges (for example, the
NYSE American NYSE American, formerly known as the American Stock Exchange (AMEX), and more recently as NYSE MKT, is an American stock exchange situated in New York City. AMEX was previously a mutual organization, owned by its members. Until 1953, it was known ...
, NASDAQ, and
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed co ...
). When a United States exchange enacts a regulatory halt for a security, other U.S. exchanges that also trade the security will honor the halt. The NASDAQ and other exchanges currently use 11 codes to specify in more detail why trading has been halted for a security. The Over The Counter Bulletin Board (OTCBB) currently uses 5 codes. A "non-regulatory" trading halt occurs if "significant order imbalance between buyers and sellers in a security" exist. (The NASDAQ stock exchange does not implement non-regulatory trading halts.) Before trading resumes, market specialists must determine an appropriate price range in which the security can trade. Unlike regulatory halts, other U.S. exchanges do not always stop trading a security affected by a non-regulatory halt.
NASDAQ OMX Nasdaq, Inc. is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock exchange, the Philadelphia Stock Exchange, and the Boston Stock Exchange, and ...
(owner of the NASDAQ stock market) display
current trading halts
for the NASDAQ, New York Stock Exchange, and the American Stock Exchange, along with a rolling 21-day history. The OTCBB maintains its ow
trading halt list
and a rolling 6-month history.


Trading suspension

A ''trading suspension'' occurs when the
United States Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against mark ...
(SEC) stops trading for a specific security because of "serious questions ... about a company’s assets, operations, or other financial information." Note that in this case, it is the SEC — not the exchange — stopping the security from being traded. On its web site, the SEC maintains a list o
trading suspensions
going back to 1995.


Trading curb

Trading curb A trading curb (typically known as a circuit breaker in Wall Street parlance) is a financial regulatory instrument that is in place to prevent stock market crashes from occurring, and is implemented by the relevant stock exchange organization. Si ...
s stop trading for an entire exchange when the market has experienced a drop (or several drops) in value.


See also

*
Stock market crash A stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic selling and underlying economic factors. They often f ...


References

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External links


United States Securities and Exchange Commission (SEC)NASDAQ OMX TraderOTC Bulletin Board
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