What is a trading halt?

From time to time, you might see the words “trading halt” next to a company’s shares on the ASX. This means the stock has temporarily stopped trading. Companies usually request a trading halt when they are about to release significant news, such as a big acquisition, a capital raisin, or unexpected financial results.

The halt gives the company time to prepare the announcement and ensures all investors get the information at the same time. Without halts, some people could trade on inside knowledge before the rest of the market is told, which would be unfair. The halt usually lasts one or two trading days, but can at times be longer. After thart, trading resumes once the news is released.

For investors, trading halts are a normal part of the market. They can be frustrating if you want to buy or sell during these halts, but they are designed to keep the market orderly. When trading resumes, the share price often jumps or falls quickly, reflecting the impact of the new infortmation.