Legal Definitions - suspension of trading

Suspension of trading refers to the temporary halt of all trading activities of a particular stock on a stock exchange due to abnormal market conditions. During this time, no buying or selling of the stock is allowed.

For example, if a company announces a major merger or acquisition, the stock exchange may suspend trading of that company's stock until the news has been fully disseminated and investors have had time to react. Another example could be if there is a sudden and significant drop in the stock's value, the exchange may suspend trading to prevent panic selling and further market instability.

These examples illustrate how suspension of trading is used to maintain market stability and protect investors from sudden and unexpected market fluctuations.