Which action could be taken to manage trading during irregular conditions?

Which action could be taken to manage trading during irregular conditions?

• A. Declare trades null and void
• B. Delay opening of trading in a security
• C. Instruct participants to adjust/delete orders
• D. Extend trading hours by one hour

Answer: (A)

During irregular market conditions, protecting market integrity and ensuring fair price discovery is the main goal. The strongest way to achieve that is to cancel trades that occurred while the market wasn’t functioning normally or that were based on erroneous quotes. Declaring trades null and void directly removes potentially distorted executions, returning the market to a clean state so proper trading can resume once conditions stabilize. Other options either affect timing (delaying opening or extending trading hours) or deal with outstanding orders rather than correcting already-processed trades, so they don’t directly address the issue of unfair or unreliable executions as effectively.

During irregular market conditions, protecting market integrity and ensuring fair price discovery is the main goal. The strongest way to achieve that is to cancel trades that occurred while the market wasn’t functioning normally or that were based on erroneous quotes. Declaring trades null and void directly removes potentially distorted executions, returning the market to a clean state so proper trading can resume once conditions stabilize.

Other options either affect timing (delaying opening or extending trading hours) or deal with outstanding orders rather than correcting already-processed trades, so they don’t directly address the issue of unfair or unreliable executions as effectively.