Trading Halt Rules and How Prop Firms Handle Halts
When the futures market halts, you’re frozen whether you like it or not. No orders go through. No stops get filled. If you’re stuck in a position during a halt, you’re riding it until the market reopens. Prop firms know this, and they enforce strict rules to stop traders from being reckless during volatile conditions.
What Causes a Futures Trading Halt?
Halt mechanics are simple: when volatility hits certain limits, the CME triggers circuit breakers. These levels are system-wide, not optional.
The Three Levels of Equity Index Halts
| Halt Level | Trigger | Duration |
|---|---|---|
| Level 1 | -7% move in S&P 500 | 15 minutes |
| Level 2 | -13% move | 15 minutes |
| Level 3 | -20% move | Market closed for the session |
These can hit fast. If you’re oversized or being reckless, a halt can blow your account open on the next print.
Why Prop Firms Care About Halts
Prop firms are protecting themselves from two things:
- Massive overnight gaps caused by extreme volatility
- Traders ignoring risk because “the market is moving fast”
They don’t want your open position jumping 30 points against you when trading restarts. That’s why some firms treat halts like news events — you’re supposed to be flat around them.
How Prop Firms Handle Open Positions During Halts
If you're in a position during a halt, here’s what happens:
- Your stop does NOT fill. It just sits there until trading resumes.
- Your targets don’t fill either.
- You cannot flatten.
That’s why a halt is one of the most dangerous events in futures trading. You’re at the mercy of the next available price, and prop firms know that’s how accounts get nuked.
Are Halts a Violation by Themselves?
No. Being in a trade during a halt is not a rule violation. But what happens after the halt can easily violate:
- Daily loss limit
- Trailing drawdown
- Max position size if volatility spikes your unrealized losses
This is where you combine your knowledge from max position size rules and drawdown logic. Halts can push you deep into loss territory before you can react.
Which Prop Firms Have Specific Halt Rules?
Most futures prop firms treat halts the same way, but a few have special warnings:
- Apex: Advises traders to avoid high-volatility periods
- Leeloo: Warns explicitly about slippage and post-halt spikes
- Topstep: Historically strict during news and halt-driven moves
None of them want traders riding halts like a lottery ticket. They expect you to manage risk, period.
How to Stay Safe When Markets Might Halt
- Trade smaller size on high-volatility days
- Avoid trading right after major news
- Don’t chase fast-moving markets
- Check volatility breakers before trading ES or NQ
- Don’t “pray and hold” into extreme moves
Most halt-related losses come from traders who were already oversized. Stay small, stay disciplined, and you won’t get caught in a mess you can’t control.
Final Takeaway
Halt rules are simple: you can’t trade during a halt, your stops won’t save you, and prop firms expect you to protect your account. Respect volatility, keep your size reasonable, and don’t get caught gambling into circuit breakers.