Which pair of prices are used to trigger stop trading during continuous trading?

Which pair of prices are used to trigger stop trading during continuous trading?

• A. The last traded price and the opening price.
• B. The reference price and the follow-up price.
• C. The best bid and the best offer.
• D. The closing price and the opening price.

Answer: (B)

Stop trading in continuous trading is triggered by how far the current price moves from a benchmark price. The benchmark, or reference price, is set for the session as the anchor, while the follow-up price is the actual price level reached by trades after that anchor. If the distance between the follow-up price and the reference price exceeds the predefined threshold, trading is halted to dampen volatility and give participants time to process new information. The other prices—the last traded price, opening price, closing price, or quotes like the best bid and offer—do not serve as the trigger for this halt. So the pair that determines stop trading is the reference price and the follow-up price.

Stop trading in continuous trading is triggered by how far the current price moves from a benchmark price. The benchmark, or reference price, is set for the session as the anchor, while the follow-up price is the actual price level reached by trades after that anchor. If the distance between the follow-up price and the reference price exceeds the predefined threshold, trading is halted to dampen volatility and give participants time to process new information. The other prices—the last traded price, opening price, closing price, or quotes like the best bid and offer—do not serve as the trigger for this halt. So the pair that determines stop trading is the reference price and the follow-up price.