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.

Need Help Passing Your Series 4 Exam?

Order Execution

Related Articles
  1. Investing

    Why China Is Suspending Market Circuit Breakers

    Chinese regulators have announced that beginning on January 8th, circuit breakers used to halt its stock markets will be suspended in order to "smooth" trading operations.
  2. Personal Finance

    How Brokers Can Avoid A Market-Maker's Tricks

    Ensure that you and your clients are getting the best deal by avoiding these three pitfalls.
  3. Financial Advisor

    Social Security: How to File and Suspend Online Before 4/29

    If you’re between the ages of 62 and 70, you could add up to $60,000 to your Social Security benefits if you file for and suspend them by April 29.
  4. Trading

    Top U.S-Regulated Option Brokers

    Options trading requires amassing significant capital and then facing high volatility. To protect yourself, ensure you trade only with regulated brokers. Here is a list of top U.S.-regulated ...
  5. Tech

    Why Betterment Delayed Trading Post-Brexit Vote

    A look at Betterment and its controversial decision to temporarily halt trading the morning after the historic Brexit vote.
  6. Trading

    High-Frequency Trading: A Primer

    An in depth look at how high-frequency trading works and who the players are.
  7. Trading

    Customize Your Trading With Flex Options

    These unique instruments take options trading to a whole new level.
  8. Trading

    Trading Options on Futures Contracts

    Futures contracts are available for all sorts of financial products, from equity indexes to precious metals. Trading options based on futures means buying call or put options based on the direction ...
  9. Investing

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
Frequently Asked Questions
  1. When are Beneficiaries of a Will Notified?

    Learn when the beneficiaries of a will must be notified, and understand how this requirement varies depending on whether ...
  2. Why Does Larry Page Pay Himself a $1 Salary?

    Google co-founder Larry Page continues to take an annual salary of only $1 as chief executive officer.
  3. What is Common Stock and Preferred Stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ...
  4. Can CareCredit be Used for Family Members?

    Learn more about the available options that CareCredit offers to pay for out-of-pocket medical procedures with little to ...
Trading Center