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This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?

by derwiki 13y ago

deleted 13y ago
[deleted]
chollida1 13y ago
Stocks get halted all the time. Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility. What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news. In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes. This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.
jarcoal 13y ago
It often happens after huge news, and it's meant to give investors time to digest it. I believe the last notable instance was after Jobs died, AAPL was halted.
- chollida1 13y ago
  > I believe the last notable instance was after Jobs died, AAPL was halted. That depends on your definition of notable. You could always use the "no true Scotsman" logic to say that Steve Jobs death was the last "notable" halt but they happen all the time. here is the Nasdaq list of halts. Notice that there have been 3 halts already today. http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts Here is a list of IROC halts( Canadian) http://micro.newswire.ca/70886-0.html http://micro.newswire.ca/70886-0.html Note that there have been 4 halts today for Canadian stocks.
  - jarcoal 13y ago
    Hah I knew I would get called on that. Let's change it to "the first one that came to my mind"
  - RobAtticus 13y ago
    In fact, Zynga's stock was halted multiple times a little over a year ago when Facebook IPO'd. Also, the halt for Jobs death was after hours so it had a smaller impact.
necrecious 13y ago
I think it can be triggered automatically when a major shift happens in a stock. I remember a few of these back in the 2000s when things were crashing left and right.
freehunter 13y ago
Stock trading can be halted after big news is released to prevent a panic. It gives the traders enough time to cool down after hearing bad news so they don't all sell at once. If there's any chance to prevent a crash, a stock halt will help. The crash can still happen, of course.
gaius 13y ago
If a stock falls by x% in time t, it's automagic.
jamestnz 13y ago
It is typical to briefly halt trading in a stock, if a company makes an announcement (or undergoes an unexpected external event) likely to have a non-trivial effect on its stock price. This is to allow time for significant news to disseminate into the marketplace. For this reason, you will frequently see companies make major announcements outside of trading hours.

This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?

by derwiki 13y ago

This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?

deleted 13y ago

[deleted]

chollida1 13y ago

Stocks get halted all the time. Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility. What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news. In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes. This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.

jarcoal 13y ago

It often happens after huge news, and it's meant to give investors time to digest it. I believe the last notable instance was after Jobs died, AAPL was halted.

chollida1 13y ago
> I believe the last notable instance was after Jobs died, AAPL was halted. That depends on your definition of notable. You could always use the "no true Scotsman" logic to say that Steve Jobs death was the last "notable" halt but they happen all the time. here is the Nasdaq list of halts. Notice that there have been 3 halts already today. http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts Here is a list of IROC halts( Canadian) http://micro.newswire.ca/70886-0.html http://micro.newswire.ca/70886-0.html Note that there have been 4 halts today for Canadian stocks.
- jarcoal 13y ago
  Hah I knew I would get called on that. Let's change it to "the first one that came to my mind"
- RobAtticus 13y ago
  In fact, Zynga's stock was halted multiple times a little over a year ago when Facebook IPO'd. Also, the halt for Jobs death was after hours so it had a smaller impact.

necrecious 13y ago

I think it can be triggered automatically when a major shift happens in a stock. I remember a few of these back in the 2000s when things were crashing left and right.

freehunter 13y ago

Stock trading can be halted after big news is released to prevent a panic. It gives the traders enough time to cool down after hearing bad news so they don't all sell at once. If there's any chance to prevent a crash, a stock halt will help. The crash can still happen, of course.

gaius 13y ago

If a stock falls by x% in time t, it's automagic.

jamestnz 13y ago

It is typical to briefly halt trading in a stock, if a company makes an announcement (or undergoes an unexpected external event) likely to have a non-trivial effect on its stock price. This is to allow time for significant news to disseminate into the marketplace. For this reason, you will frequently see companies make major announcements outside of trading hours.