what is stock halting and how/why does it happen
In: Economics
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Usually whenever uncontrollable factors such as board member deaths and the like are projected to lower stock value that entity can say we wont pay beyond a percentage of the stocks value basically halt/locking the price share as a result. People may want to trade for lower prices but in the end the actual value of the stock cant be held against others that are in the same industry or market because the company has locked their shares from being worth more and not less. In practice this protects current shareholder assets value to a degree by deterring potential buyers who intend to liquidate any proceeds they might gain from shorting the stock or cashing out before a fiscal period has passed.
Stock halting is bringing a particular stock to a pause.
It happens for pending news announcements like earnings releases, acquisition announcements, , regulatory concerns like investigations or compliance issues.
A halt allows investors to assess the situation.
When certain stocks or indexes have sudden, extreme price movements, the stock exchange will pause trading in those products. This is usually to prevent technical glitches and automated trading from causing even more extreme price movements and the halts are usually temporary – several minutes or hours. If the extreme price volatility continues, trading can be paused successively in the same day, each pause for a longer period. In some cases, the exchange can halt trading for the duration of the trading day.
One version of this is called a “market wide circuit breaker” or MWCB. Here’s [how NYSE describes it](https://www.nyse.com/markets/nyse/trading-info#mwcb).
There are other versions of this that are more specific to individual stocks. For example, a regulatory action by *e.g.* the SEC can cause the exchanges to suspend trading in a particular stock, too. But this is rare. Most trading halts are triggered by the stock exchange computers using pre-programmed logic to halt trading based on extreme price movements.
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