what is stock halting and how/why does it happen
In: Economics
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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