2008-05-11 01:31:26
Did A Stock That You Own Get Halted? What Happens Now?
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There is nothing scarier than waking up in the morning and hearing that a major stock in your portfolio has been halted. You scour different websites for possible news but can't find anything. You soon learn that the stock is a "T1", which means that there is a halt due to pending news. You hope for the best (buyout or major piece of positive news) but fear the worst (missed earnings, restatement of earnings, etc). In situations like this, it is hard to imagine anything other than really bad news. Trust me, I've been there before myself.
First off, why do stocks get halted in the first place?
Stocks are usually halted because there is some major piece of news expected out on the stock. The reason for the halt is so all investors learn of the information and have the ability to act accordingly at the same time. If there were no halt and a company released really bad news, then someone with multiple news feeds would have a major advantage over a casual investor.
Second, what do the different codes mean what a stock is halted?
As mentioned, the symbol that you have likely run into if a stock of yours has been halted is "T1". "T1" means that a stock has been halted due to pending news.
When a stock has released that news and is still halted, then the symbol gets changed to a "T2", which means that the stock is still halted but the news has now been disseminated. This is done to allow the market and market participants to digest the news and plan accordingly.
Here are some of the other symbols that you may run in to and what they mean:
T6 - Regulatory Halt, Extraordinary Market Activity
T12 - Information Requested by Listing Market
H4 - Halt, Non-Compliance
H9 - Halt, Filings Not Current
H10 - Halt, SEC Suspension
H11 - Halt, Regulatory Concern
These are the most common symbols that you will encounter. For a full list, you can visit Nasdaq's web site.
When a stock that you are holding is halted, there is really nothing that you can do. You can't buy or sell shares, so there is no point in contacting your broker.
When the stock does re-open for trading, keep in mind that many people will be either frantically buying (if there was good news released) or selling (if there was bad news released). Keep this in mind because if you place a market order, you may end up with a much worse price than if you had waited an hour or so.
Normally a halt will last an hour or two at the most - in rare circumstances, a halt can last for days, weeks and even months.
The only thing that you can do is try not to panic, and wait for the news to get released.
Filed under: Stock Market Education | General Knowledge
4 COMMENTS - What Say You?
Comment by RCSundevil on December 07, 2009 @ 12:26 am
Have you ever heard of a stock being partially halted? For instance...this past Friday HESG was halted (partially) right after they issued a press release. TDAmeritrade and Scottrade would only allow people to sell shares of that security and were not allowing people to open new positions or buy! Some have suggested this is Naked Short Selling. Would be curious to get your opinion!
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Comment by Adam on December 21, 2009 @ 11:42 am
Bronco energy on the tsx is halted right now. Hoping for a good christmas present not the opposite...
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Comment by Mark on November 19, 2010 @ 12:21 am
What happens to options holders? Are they just out of luck on their investment? If it's halted for days, weeks or months then many of those options will expire.
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Comment by indifferent on March 12, 2011 @ 6:27 am
CCME T1 HALT yesterday. Ho-dee-humm.. hurry up and wait.
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