Nasdaq Iceland will on December 1, 2017 introduce static volatility guards for equity instruments and ETFs on its Main Market and First North Iceland. The static volatility guards are in addition to dynamic volatility guards which are already in place for equities and ETFs. On December 1 dynamic volatility guard thresholds will also be revised for selected equity instruments.
The static volatility guard is a trading pause and resumption process designed to restore an orderly market in a single order book. It reduces the likelihood of erroneous transactions taking place and, hence, the need for cancellation of trades. The static volatility guard will be utilized if a proposed trade deviates too much in percentage from a reference price, which is the day's opening auction price or, if there was no opening auction trade, the previous day‘s closing price. When the static volatility guard is triggered, continuous trading is halted. An auction period follows which lasts 180 seconds (5 second randomization at the end), after which the order book moves back to continuous trading.
For further information on volatility guards please see the INET Nordic Market Model document on the “Rules and Regulations” page for the Nasdaq Nordic Exchanges.
Configuration
Please see the attached Excel file for the threshold values for both static and dynamic volatility guards.
Time schedule
- INET Test (NTF and M2) – Already in NTF and M2
- INET Production – December 1, 2017
If you have any questions regarding this Exchange Notice, please contact Nasdaq Iceland‘s Trading Division at + 354 525 2850 or floor.ice@nasdaq.com
