During continuous trading, which prices serve as comparison values for triggering stop trading?

During continuous trading, which prices serve as comparison values for triggering stop trading?

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

Answer: (B)

In continuous trading, stop trading decisions hinge on two prices that serve as baseline checkpoints: the reference price and the follow-up price. The reference price is the baseline used to judge whether price moves are excessive; if the market moves beyond a defined threshold relative to this price, a stop trading is triggered to prevent disorder. When trading resumes after a halt, a follow-up price is established and becomes the new benchmark for judging subsequent price moves. This pair provides a stable framework for both triggering halts and safely resuming activity, rather than relying on a single data point like the last traded price, or on opening/closing prices or current quotes alone.

In continuous trading, stop trading decisions hinge on two prices that serve as baseline checkpoints: the reference price and the follow-up price. The reference price is the baseline used to judge whether price moves are excessive; if the market moves beyond a defined threshold relative to this price, a stop trading is triggered to prevent disorder. When trading resumes after a halt, a follow-up price is established and becomes the new benchmark for judging subsequent price moves. This pair provides a stable framework for both triggering halts and safely resuming activity, rather than relying on a single data point like the last traded price, or on opening/closing prices or current quotes alone.