Held at the Opening

Held at the opening is when a security is restricted from trading at the stock exchange opening for the day.

Held at the opening is in effect if a halt on trading a stock is called before the opening of the trading day. Stock exchanges can halt trading on securities at any time, but trading usually resumes in under an hour. Such halts are employed to protect investors. There are three main reasons why a stock is held at the opening: new information is expected to be released by a company that may have considerable impact on its stock price; there is an imbalance in buy and sell orders in the market; a stock does not meet regulatory listing requirements. Trading delays are trading halts that occur at the beginning of the trading day. Traders can find trading halt and delay information on an exchange’s website.

A trading halt in general is a temporary suspension in the trading of a particular security on one or more exchanges, usually in anticipation of a news announcement or to correct an order imbalance. A trading halt may also be imposed for regulatory reasons. During a trading halt, open orders may be canceled and options may be exercised.

The Securities and Exchange Commission (SEC) highlights two types of trading halts and delays that may impact investors: regulatory and nonregulatory. While the SEC cannot halt trading, it may suspend trading for up to 10 days and, if needed, revoke the security’s registration. Regulatory halts occur when a company has pending news that may affect the security’s price. By halting or delaying trading, everyone has time to assess the impact of the news. These halts may also occur in cases when a security may not continue to meet an exchange’s listing standards. Non-regulatory halts occur when there is a significant imbalance in pending buy and sell orders in a security. Exchange specialists typically respond by disseminating information to investors concerning a price range where trading may begin again on the exchange. Notably, non-regulatory halts are not shared across exchanges, so the security may continue to trade.

Stock exchanges can take measures to ease panic selling by invoking Rule 48 and halting trading. Under the 2012 rules, market-wide circuit breakers kick in when the S&P 500 index drops 7% for Level 1; 13% for Level 2; and 20% for Level 3 from the prior day’s close. A market decline that triggers a Level 1 or 2 circuit breaker before 3:25 p.m. Eastern Time will halt trading for 15 minutes, but will not halt trading at or after 3:25 p.m.