Forefront Communications

The Wall Street Journal: Volatility Spurs Onslaught of Five-Minute Trading Halts in GameStop

Forefront Communications

Forefront Communications

As the market continues to grapple with GameStop and AMC’s rapid price changes, capital markets data vendor MayStreet provided data on the recent events.

Frenetic activity in stocks like GameStop Corp. and AMC Entertainment Holdings Inc. has led to numerous trading halts, as wild price swings repeatedly froze trading in the popular stocks for five minutes at a time.

In January, there were 40 such halts in GameStop, according to MayStreet Inc., a financial-data vendor. That included 19 halts on Thursday alone. That was the day when Robinhood Markets Inc. and other brokers imposed trading restrictions on GameStop and AMC, sending the stocks on a wild ride. GameStop shot up as high as $483 and as low as $112.25 that day, before closing at $193.60, a 44% drop from the previous day’s close. GameStop was also halted for five minutes this morning.

By comparison, there were only six such trading halts in Gamestop during all of last year, the MayStreet data shows.

Such pauses are called limit up/limit down halts, and they kick in automatically when stock prices are moving extremely fast. The Securities and Exchange Commission pushed through the rules governing LULD halts in the wake of the May 2010 “Flash Crash” in which the Dow Jones Industrial Average plunged nearly 1,000 points in a matter of minutes, only to rebound just as quickly.

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