Which prices serve as the reference values for triggering stop trading during continuous trading?

Which prices serve as the reference values for triggering stop trading during continuous trading?

• A. Opening price and closing price.
• B. The reference price and the follow-up price.
• C. Current best bid and ask.
• D. Last traded price only.

Answer: (B)

In continuous trading, the system uses a baseline and a follow-up price to decide if trading should be halted. The baseline is the reference price, which represents the current fair level before a potential move. The follow-up price is the price of the next trade after a movement begins, used to confirm whether the move is real and sustained or just a one-off spike. If the price moves beyond the allowed range defined by these two prices, trading is stopped to prevent disorder and give traders time to digest new information. Using both the reference price and the follow-up price helps avoid halting for a single anomalous trade and ensures the halt reflects a genuine market move. Opening and closing prices relate to session boundaries, the current best bid and ask are just quotes, and the last traded price alone could be misleading if it comes from a single transaction.

In continuous trading, the system uses a baseline and a follow-up price to decide if trading should be halted. The baseline is the reference price, which represents the current fair level before a potential move. The follow-up price is the price of the next trade after a movement begins, used to confirm whether the move is real and sustained or just a one-off spike.

If the price moves beyond the allowed range defined by these two prices, trading is stopped to prevent disorder and give traders time to digest new information. Using both the reference price and the follow-up price helps avoid halting for a single anomalous trade and ensures the halt reflects a genuine market move. Opening and closing prices relate to session boundaries, the current best bid and ask are just quotes, and the last traded price alone could be misleading if it comes from a single transaction.