Trading Halts do not cause a change in the stock price of firms.Any illegal function caused by any traders are removed and brought to the attention of other investors.Each market participant gets the equal time to be informed about any news announcement.Hence, the company immediately requested the Australian Stock Exchange for a trading halt on the company’s stock prior to the open of trade on that morning, until they were sure that the news had been properly distributed to the public. This news was sure to cause a sharp decline in stock price as well as create an unfair arbitrage opportunity for people within the organization with access to the news. Included in the missing were the CEO and the Chairman. In June 2010, 6 executives of Sundance Resources Ltd, a mining company in Australia, went missing on a flight in West Africa. The “Over The Counter Bulletin Board” (OTCBB) currently uses 5 codes. The NASDAQ and other exchanges currently use 11 codes to specify in more detail why trading has been halted for a security. O The halt gives the market specialist (market-maker) enough time to clear out the problems caused by this imbalance. There is a significant order imbalance between the buyers and sellers of the securities.

O It prohibits any trader with inside information from benefiting by trading that security before that news is publicly available. The respective company is in the process of announcing important news or information that will significantly impact the stock price.Trading Halts are generally made by the exchanges.

Trading halts