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Tuesday, July 5, 2016

Equity Trader Alert #2016 - 149
Revised: Update to Opening Reference Price Calculation for Limit Up/Limit Down


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  • Industry Announcement

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In coordination with other Primary Listing Exchanges, effective Monday, July 18, 2016, Nasdaq will be modifying the manner in which the initial Limit Up/Limit Down (“LULD”) Reference Price is determined in cases where a security does not trade in the opening auction on the Primary Listing Exchange. This change will improve the effectiveness of the first LULD Price Bands established at market open.

Currently, if a security opens on The Nasdaq Stock Market with a quotation because no trade is executed in the opening auction, the first Reference Price for such security would be the midpoint of the bid and ask quotation on the Primary Listing Exchange. Effective July 18, 2016, the initial Reference Price of the trading day will be modified to use the closing price of the security on Nasdaq from the previous trading day.


 


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