What is volatility interruption?Volatility Interruption
When a stock's price moves too far from a reference price in a short time, the exchange pauses continuous matching for a few minutes and switches to a call auction or a limited price band, so prices can't spin out of control in an instant.
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- Hong Kong Stock RulesNo Price Limits and the Volatility Control Mechanism (VCM)
Hong Kong has no daily price limit, so big news can move a stock sharply within the day; some large stocks have the VCM, which forces a 5-minute cooling-off when the price moves too far too fast.
- Korea Stock RulesVI: Pausing When the Price Jumps Too Hard
When a stock's price moves far from its reference price in a short time, the Korea Exchange pauses continuous trading for about 2 minutes and switches to a single-price auction so the market can cool down.
- Taiwan Stock RulesThe Intraday Price Stabilization Measure
During trade-by-trade matching, if the next trade would move too far from the previous one, the exchange delays matching for about 2 minutes and switches to a call auction, so prices can't spin out of control in an instant.
- US Stock RulesCircuit Breakers and LULD
Individual US stocks have no daily price limits, but a 7%, 13% or 20% drop in the broad market triggers a circuit breaker, and a stock that breaks out of its LULD band is paused for a few minutes.
Related terms
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Go to “No Price Limits and the Volatility Control Mechanism (VCM)”