![]() Individual stocks can be halted for news, volatility, or regulatory reasons. Individual stock halts are initiated by the specific stock exchange where the stock is listed. The Securities and Exchange Commission (SEC) can also suspend trading in the stock of a company it suspects of misleading or illegal activity. A market-wide trading halt occurs when the S&P 500 index falls a set percentage below the previous closing price. The suspension, or trading halt, provides time for the marketplace to absorb the announcement, good or bad, and helps reduce volatility in the stock price.Įxamples of news that could cause a suspension are a poorer than expected earnings report, a major innovation or discovery, a merger, or significant legal problems. In the case of an expected announcement, the affected company generally notifies the exchange that the news is imminent. According to Barron’s, the halts were made under the Limit Up-Limit Down provision, intended to. Trading is typically halted either because an important piece of information about the issuing company is about to be released or because there's a serious imbalance between buy and sell orders, often triggered by speculation. After the opening of trading on March 29, the NYSE briefly imposed a halt on both AMC and GME. Suspended trading means that an exchange has temporarily stopped trading in a particular stock or other security. Copyright © 2003 by Houghton Mifflin Company. ![]() Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. As the Securities and Exchange Commission (SEC) explains on its website, a trading halt typically lasts less than an hour (but can be longer), and is called during the trading day to allow a company to 'announce important news or where there is a significant order imbalance between buyers and sellers in a security.
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