United States USA

Trading Halts and Circuit Breakers

What is a Trading Halt & Delay?

 

Securities exchanges, such as the New York Stock Exchange (NYSE) as well as the Nasdaq Stock Market, have the authority to halt or delay trading in a security. 

A trading halt 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. 

A trading delay (or "delayed opening") is called if either of these situations occurs at the beginning of the trading day. 

You can find out which individual stocks have had their trading halted on the NYSE and the Nasdaq Stock Market.

For more information on Trading Halt & Delays, click here.

 

Market-Wide Circuit Breakers 

 

Securities exchanges have procedures for coordinated cross-market trading halts if a severe market price decline reaches levels that may exhaust market liquidity.  These procedures, known as market-wide circuit breakers, may halt trading temporarily or, under extreme circumstances, close the markets before the normal close of the trading session.

There are three circuit breakers that can trigger market-wide halts in the US:

  • Level 1: The S&P 500 drops 7% from its closing price the previous day, triggering a 15-minute trading halt.
  • Level 2: The S&P 500 drops 13% from its closing price the previous day, triggering another 15-minute trading halt.
  • Level 3: The S&P 500 drops 20% from its closing price the previous day, and trading is suspended for the remainder of the day.

Level 1 and Level 2 circuit breakers can only take effect before 3:25pm ET. After 3:25pm ET, only a Level 3 halt—a 20% decline in the S&P 500—would cause trading to stop for the day.

 

Can I enter orders during a market halt, trading halt or trading delay?

  • You  can only enter limit orders and strategy orders during a halt, but they will not be eligible for execution until the halt is lifted.  

What happens to my pending orders during a market halt, trading halt or trading delay?

  • Any market orders will be automatically canceled. Limit orders will remain open but will be eligible for execution after the halt has been lifted.*
  •  We suggest using limit orders when appropriate as prices can fluctuate and spreads can widen significantly after a halt is lifted. 

*There can be small differences in the re-opening times for symbols on the platform.

 

Can I log into my Ustocktrade account during a market halt?

  • Yes, the market halt will only restrict trading. All other Ustocktrade services and features will be unaffected. 

 

Can I deposit and/or withdraw funds during a trading halt?

  • Yes. You can deposit or withdraw funds as you normally would.
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V.03 03/04/2021

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