In contrast to an SEC trading suspension, which lasts for 10 days over a public interest concern, a trading halt is used by is used by securities exchanges like the New York Stock Exchange (NYSE) and the NASDAQ, and usually lasts less than an hour.
Reasons for a Trading Halt
A trading halt can be called at any time during the trading day
- So a public company can release important news which is likely to have a huge effect, either positive or negative, on the stock’s volume; or
- When there is a major imbalance in orders between buyers and sellers in a stock.
What is a Trading Delay?
A trading halt is also called a trading delay. The term “delayed opening” is used when a securities exchange halts trading at the start of the trading day.
Types of Trading Halts and Delays
There are two different kinds of trading halts and delays.
- Regulatory, usually when a public company has pending news that the exchange believes will cause a volume spike. This allows market participants time to assess the impact of the news release.
- Non-regulatory, usually when there is a question about whether the security continues to meet the exchanges listing requirements or when there is a significant order imbalance.