A temporary trading halt was recently implemented on the NASDAQ stock exchange, causing a pause in all trading activities. This measure aims to maintain fairness, prevent market manipulation, and protect the interests of all market participants.
During a trading halt, brokerage firms are prohibited from disseminating any quotations or indications of interest related to the affected security. They are also not allowed to accept any orders pertaining to the halted security. These strict measures ensure that trading activities remain fair and transparent during the pause.
The trading pause is determined based on the Pause Threshold Price, which deviates by 10% from the last eligible sale recorded on the Consolidated Tape for the specific security. This calculation considers all prints within a rolling five-minute timeframe. By accurately reflecting market conditions, the threshold provides a fair basis for initiating the trading halt.
In the event of a Level 1 or Level 2 Market-Wide Circuit Breaker (MWCB) halt declared with 35 minutes or more remaining in regular trading hours, Nasdaq follows a specific procedure. After a 15-minute halt, trading in each Nasdaq-listed security resumes using the standard halt cross process. This process ensures an orderly and controlled reopening of trading activities, minimizing disruptions and maintaining market stability.
While a temporary trading halt may cause some inconvenience, it is an essential measure to protect the integrity of the market. NASDAQ is committed to creating a fair and transparent trading environment, even in the face of unexpected events.
Sources: NASDAQ Trading Rules