# Limit up-limit down (LULD)

> A US rule that sets price bands around each stock's recent average price and pauses trading for five minutes when the stock cannot trade inside them.

Source: https://www.quantisnow.com/glossary/luld
Topic: Glossary / Market structure
Also known as: LULD, limit up limit down, LULD halt, volatility pause, LUDP
Last updated: 2026-10-27

Limit up-limit down (LULD) is the US mechanism that prevents individual stocks from trading outside price bands set around their recent average price. If a stock cannot trade within its bands for 15 seconds, trading pauses for five minutes. It has been in effect since 2013.

## How it works

Each stock has a reference price, generally its average trade price over the prior five minutes. Upper and lower bands are set a percentage away from that price:

| Stock | Price above $3.00 | $0.75 to $3.00 | Below $0.75 |
|---|---|---|---|
| Tier 1 (S&P 500, Russell 1000, some ETPs) | 5% | 20% | Lesser of $0.15 or 75% |
| Tier 2 (all other NMS stocks) | 10% | 20% | Lesser of $0.15 or 75% |

The bands are doubled during the opening period (9:30 to 9:45 a.m. ET). They are also doubled in the final 25 minutes (3:35 to 4:00 p.m. ET) for lower-priced Tier 2 stocks, while Tier 1 stocks and Tier 2 stocks above $3 keep their normal bands into the close.

When the national best offer equals the lower band or the national best bid equals the upper band, the stock enters a "limit state." If it does not exit within 15 seconds, the primary exchange declares a five-minute trading pause, then reopens through an auction. Trades cannot execute outside the bands.

## Why it matters for traders

LULD pauses are the "halted, volatility" events that interrupt fast moves in small caps after news. They can stop a stock several times in a session. Because the reference price keeps moving, a stock can keep running in 10% steps, pausing at each.

Stop orders offer little protection here: the reopening auction can print well past the band, and your order fills at that price.

## Example

Hypothetical Bluefin Robotics (ticker BFRB), a Tier 2 stock, has a reference price of $20.00 at 11:00 a.m. Its bands are $18.00 and $22.00. On contract news, buyers push the best bid to $22.00 and it stays there for 15 seconds. Trading pauses for five minutes, and the reopening auction prints at $23.40, with new bands set around the updated reference price.

## FAQ

### What does LUDP mean on a halt list?

LUDP is the code for a volatility trading pause triggered under the LULD plan.

## Related terms

- [Trading halt](https://www.quantisnow.com/glossary/trading-halt.md): A temporary stop in trading of a security, called by an exchange or regulator for pending news, volatility, or regulatory concerns.
- [Market-wide circuit breaker](https://www.quantisnow.com/glossary/circuit-breaker.md): A rule that halts trading in all US stocks when the S&P 500 falls 7%, 13% or 20% from the prior day's close.
- [NBBO (national best bid and offer)](https://www.quantisnow.com/glossary/nbbo.md): The highest bid and lowest offer for a stock across all US exchanges, the benchmark brokers use for best execution.
- [Gap up and gap down](https://www.quantisnow.com/glossary/gap.md): A price jump between sessions, when a stock opens above the prior high (gap up) or below the prior low (gap down), usually on news.
- [Short sale restriction (alternative uptick rule)](https://www.quantisnow.com/glossary/short-sale-restriction.md): A rule that, after a stock drops 10% or more from the prior close, lets short sales execute only above the national best bid for that day and the next.

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