Series 4

AAA

The Options Market Place - Fast Markets And Trading Halts

A sudden influx of orders as a result of news can result in fast market conditions in the option markets. If two floor officials agree that the conditions are such that the integrity of the market is compromised as a result of the fast market conditions, the floor officials can:

  • Institute a trading rotation
  • Assign trading of options to another board broker
  • Allow board broker clerks to execute orders
  • Temporarily suspend the firm quote rule and Automatic executions
  • Take other actions that may be required

If the integrity of the markets cannot be restored after taking these actions, trading may be halted in the options if two floor officials agree. Trading can be halted by the floor officials for up to two business days if the underlying stock is halted, has a delayed opening, or if other unusual circumstances exist. Only the board of directors at the CBOE can suspend the trading of options if the trading in the option has been halted for two days or if the underlying security has been suspended on its principal exchange or other unusual circumstances exist. The exchange during unusual market conditions may also suspend the use of stop and limit orders to help restore the market’s integrity.

SecuritiesCE.com - How to pass the series 4 exam

Order Execution
comments powered by Disqus
Related Articles
  1. Trying On Potential Employers
    Professionals

    Trying On Potential Employers

  2. Introduction To Financial Planning Organizations
    Personal Finance

    Introduction To Financial Planning Organizations

  3. Municipal Bond Tips For The Series 7 ...
    Insurance

    Municipal Bond Tips For The Series 7 ...

  4. The 9 To 5 Job: Challenging How We Earn ...
    Economics

    The 9 To 5 Job: Challenging How We Earn ...

  5. The Rise Of The Modern Investment Bank ...
    Insurance

    The Rise Of The Modern Investment Bank ...

Trading Center