Definition of 'Flash Freeze'
A sudden shutdown in trading activity on an exchange. “Flash freeze” was first used to refer to the abrupt outage on the Nasdaq on Aug. 22, 2013, which halted trading for three hours on one of the busiest U.S. stock exchanges. A flash freeze can be triggered by a number of events – system overload, volatile algorithmic trading, faulty software and even “hacking” – although the exact cause may be difficult to identify initially. A flash freeze should not be confused with “flash crash,” which refers to the 1,000-point plunge in the Dow Jones Industrial Average that occurred within a matter of minutes on May 6, 2010.
Investopedia explains 'Flash Freeze'
Flash freezes may become more common in the future due to a confluence of factors including:
From the investor’s point of view, the impact of a flash freeze depends on the length of his or her investment horizon. A temporary exchange shutdown – and the consequent loss of market liquidity – should make little difference to a long-term investor whose investing horizon is measured in years. However, it can be devastating to a day trader who is unable to close out positions due to an exchange outage, and is forced to liquidate these open positions at a huge loss when trading resumes.