What Is Trading Halt?
A trading halt pauses all trading in a security for minutes to hours. The most common causes: news pending (the exchange holds trading before a material announcement), limit-up/limit-down circuit breakers triggered by extreme price moves, or regulatory issues like SEC investigations.
Single-stock circuit breakers trigger when a stock moves 5-10% from its average over a 5-minute window. The halt is typically 5 minutes, after which trading resumes. Market-wide circuit breakers (Level 1, 2, 3) trigger at S&P 500 declines of 7%, 13%, and 20% from the prior close.
Halts create acute risk for traders: positions can be stuck during the halt, and when trading resumes, prices often gap significantly. Day traders often avoid stocks that halt repeatedly. For news halts, the resume frequently moves the stock 20%+ in the direction of the news — opportunity and danger in equal measure.
Related terms
- Earnings Report — Quarterly publication of a company's financial results.
- Gap Up — Price opening significantly higher than the prior close, leaving a 'gap' on the chart.
- Volatility — A statistical measure of how much an asset's price varies over a period.
- Circuit Breaker — Automatic trading halt triggered by extreme price movement to give markets time to cool off.