Trading halt
A trading halt is a temporary pause in trading a specific , ordered by an exchange, often while material news is pending or being digested by the market. Unlike a , which pauses the entire market based on a broad index decline, or , which pauses a automatically when its price tries to move outside a set band, a trading halt on this basis is typically a deliberate decision tied to a specific company event.
Exchanges commonly halt a ahead of an anticipated major announcement, such as a merger, an surprise, or significant regulatory news, giving the company time to release the information properly and giving the market time to absorb it before trading resumes, rather than letting trading continue while material information is unevenly known among different investors. Halts also happen for purely technical reasons, such as an extreme and unexplained price move that needs investigation, or a problem with how a venue is processing orders.
A trading halt has no fixed duration, it can last anywhere from a few minutes to the remainder of the trading day or longer, depending on why it was called and how long it takes to resolve. When trading resumes, the generally reopens through a special reopening auction similar in principle to the , designed to set a fresh price that reflects all the new information rather than simply picking up from wherever the last trade left off. Investors holding a halted stock cannot buy or sell it until trading resumes, regardless of what news comes out during the halt.