What is the Difference Between a Trading Halt and Suspension from Official Quotation?

Companies have to make announcements now and then. With the hustle (mostly) and bustle of the stock market, you may need more than the typical tapping on the glass to be heard. Companies have the option to temporarily suspend trades when they have an important announcement to make. This gives investors a breather to evaluate their trading options. A trading halt shares similarities with suspension of official quotation because both stops trading activities related to the company, but they do have a difference in relation to the sequence of events.

Trading Halt

As its name suggests it's the temporary stop in trading of a particular stock. This is usually done due to an announcement that will be made by the company of the stock being traded. It can be imposed for regulatory reasons or to correct an order imbalance. During this time open orders can be cancelled. The halt gives the investors the chance to buy, sell, or hold based on the recent news. The stock exchange can also impose a halt when it detects suspicious activity on a stock price. A trading halt can last in 30 minutes up to 48 hours.

Suspension of Official Quotation

If the company cannot make the pending announcement following a trading halt, it will be suspended by the Australian Stock Exchange. The suspension will remain until the company can make the announcement.

Example:

Blue Steel Consulting requests for a trading halt on 4/27/2011 pending an announcement. Prior to the opening of the market, the company is suspended on 5/1/2011 by the ASX after failing to make the announcement. The company can also request to be put in suspension if its not able to release the announcement after 48 hours.