When does the exchange stop trading in CLOB?

When does the exchange stop trading in CLOB?

• A. If next price compared to reference price is outside Stop Trading Range
• B. If there are no bids for a long period
• C. If the best bid equals the best offer
• D. If there is a price gap larger than a threshold

Answer: (A)

In a Central Limit Order Book, trading is halted when price protection rules kick in. A reference price is used as an anchor, and a Stop Trading Range is defined around that price. If the next price that would be traded would lie outside this Stop Trading Range, the exchange stops trading. This pause helps prevent extreme moves and lets information settle. So the correct trigger is when the next price relative to the reference price falls outside the Stop Trading Range. The other scenarios describe different halt or liquidity conditions, but they’re not the Stop Trading Range rule.

In a Central Limit Order Book, trading is halted when price protection rules kick in. A reference price is used as an anchor, and a Stop Trading Range is defined around that price. If the next price that would be traded would lie outside this Stop Trading Range, the exchange stops trading. This pause helps prevent extreme moves and lets information settle.

So the correct trigger is when the next price relative to the reference price falls outside the Stop Trading Range. The other scenarios describe different halt or liquidity conditions, but they’re not the Stop Trading Range rule.