LULD price bands and trading pauses
A short recap of how LULD price bands, the 15-second limit state and five-minute trading pauses fit together, plus the approved overnight bands, with three exercises. The full FennEdge guide holds the rules, examples and sources.
Read the full guide first
This lesson is a short recap. The complete explanation, with worked band examples, the straddle state, closing-period handling and how LULD differs from SSR and news halts, lives in FennEdge's guide:
LU and LD explained: from LULD price bands to trading pauses →
Read it, then come back for the exercises.
Learning objectives
After the guide and this recap, you should be able to:
- separate three observations: a price band, a limit state and a declared trading pause;
- compute a band from a reference price and the day's percentage parameter;
- say what changes in the approved overnight session, and what is still only scheduled.
Recap
Bands move with a reference price. The Limit Up–Limit Down (LULD) Plan sets a lower and an upper price band for each NMS stock during regular trading hours. The reference price is the arithmetic mean price of eligible trades over the preceding five minutes, and it is updated when it moves by 1% or more. Trades outside the bands are blocked. There are no LULD bands in the premarket or after-hours sessions.
The percentage depends on tier and price. Under the Plan (checked 2026-10-06):
| Stock | Reference price | Band |
|---|---|---|
| Tier 2 (most small caps) | above $3.00 | 10% |
| Tier 1 and Tier 2 | $0.75 to $3.00 | 20% |
| Tier 1 and Tier 2 | below $0.75 | the lesser of $0.15 or 75% |
| Tier 1 (S&P 500, Russell 1000, selected ETPs) | above $3.00 | 5% |
Which row applies for the whole trading day is set by the previous day's closing price on the listing exchange. Between 15:35 and 16:00 ET the percentages double for all Tier 1 stocks and for Tier 2 stocks priced at $3.00 or less.
A limit state comes before a pause. When the national best bid sits at the upper band, or the national best offer at the lower band, the stock enters a limit state. If it does not exit within 15 seconds, the listing exchange declares a five-minute trading pause. No trades occur during the pause. Touching a band, entering a limit state and pausing are three different events.
Reopening is an auction, not a timer. After five minutes the listing exchange attempts to reopen through its auction. The auction can be extended, and the first price can land far from the pause price. What happens to your resting, new and stop orders meanwhile is covered in What happens to your orders during a halt or pause.
Overnight bands are approved but not yet running. Status as of 2026-10-06: the SEC approved LULD Plan Amendment No. 27 on 2026-08-05, with overnight protections expected to start on 2026-12-06. From 21:00 to 04:00 ET, bands are static: 20% below the lower and 20% above the higher of two reference prices (the official close and the last round-lot sale as of 19:45 ET), with minimum widths of $1.00 for stocks that closed under $1.00 and $3.00 for the rest. Reaching an overnight band triggers no automatic pause. The listing exchange may declare a regulatory halt; during it, orders are rejected, and the stock does not reopen before 04:00 ET. Recheck after launch.
Apply it in FennEdge
The Scanner (paid: Plus, Pro or Max; as of 2026-10-06) has halt and resume panels for Nasdaq-listed LULD pauses only; it does not cover news halts or NYSE-listed stocks. Halt price and volume shown there are last-known quotes, not necessarily the quote at the moment of the pause.
Exercises
Three exercises follow: a concept check on the limit-state sequence, a band calculation, and a scenario in the approved overnight session. Exercises, answers and progress are available after signing in.
Primary sources
- LULD Plan. Plan to Address Extraordinary Market Volatility, Amendment 20 and the plan documents page.
- SEC. Order approving LULD Plan Amendment No. 27 (overnight price bands), Release No. 34-106042 (August 5, 2026).
- FennEdge. LU and LD explained: from LULD price bands to trading pauses.
Sources checked 2026-10-06. Overnight rules are approved but not yet in operation; recheck after 2026-12-06. Prices in the exercises are fictional and Illustrative. This lesson is education, not a recommendation to buy or sell any security. Past patterns do not indicate future results.