The New York Stock Exchange used a trading halt during the 1987 crash to slow trading.
On October 20, 1987, the NYSE suspended trading in several stocks after the previous day’s collapse had overwhelmed normal market operations. The halt was intended to give investors and market participants time to absorb information and reduce the risk of disorderly selling.
The crisis exposed weaknesses in market infrastructure. Trading volume surged, telephone lines became overloaded, and specialists responsible for maintaining orderly markets faced extreme pressure. The event also highlighted how stock, options, and futures markets could interact during a rapid decline.
After the crash, exchanges and regulators developed coordinated circuit breakers. These mechanisms can pause trading after large index movements, giving participants a short period to evaluate prices. A trading halt is not the same as a permanent closure: it is a temporary interruption designed to restore orderly conditions.