Trading Halt is a pause, stoppage or temporary suspension in trading of a security or securities on the Stock Exchanges. There is no particular rule regarding the frequency or duration of trading halts and these may be imposed more than once a day at any time during the market session. All open orders may be cancelled during the Trading Halt. The lifting of a trading halt is referred to as ‘trade resumption’.
How does Trading Halt work?
Trading Halt may be imposed due to the following reasons: 1. Regulatory or legal announcement 2. Corporate level announcements like mergers, acquisitions, restructuring or similar news 3. Material financial changes 4. Key management changes 5. Massive volatility in stock’s price