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Volatility Halt

Glossary

A volatility halt is a temporary trading suspension triggered when a stock or security experiences sudden and extreme price movement within a short period. These halts are designed to protect investors, prevent panic selling, and allow time for market participants to absorb new information.

Volatility halts are typically enforced by stock exchanges (like the NYSE and Nasdaq) under Limit Up-Limit Down (LULD) rules, which prevent stocks from trading outside a specified price range.

Key Reasons for a Volatility Halt:

  • Excessive price swings in a short timeframe (up or down).
  • News pending that could significantly impact stock price.
  • Regulatory concerns or trading imbalances.

Volatility halts usually last 5 to 10 minutes, though in extreme cases (like major market crashes), trading may be paused for longer. Traders watch for these halts as potential signals of high-impact news or liquidity issues in the stock. See also: Circuit Breaker

You can track volatility halts LIVE in real-time on the Unusual Whales Trading Halts page.