Volatility Guard

A concept that was independently and separately developed by Nasdaq and Volguard.
Volatility Guard, a volatility-based trading pause introduced by Nasdaq that was approved by the SEC in 2011. Volatility Guard sought to protect investors and promote a fair and orderly market by reducing the negative impacts of sudden and unanticipated price movements in as in the case of the flash crash of May 2010. Volatility Guard was also inspired by the need for a unified market solution for the management of severe market volatility and its purpose has been compared to the Liquidity Replenishment Points rule of NYSE.
In September 2010, Nasdaq OMX Group, Inc. introduced updated Volatility Guards on its Nordic and Baltic equity markets in an effort to protect both investors and listed companies from periods of volatile asset prices. Once Volatility Guard is triggered in Nordic markets, a stop to continuous trading precedes an auction period which lasts about one to three minutes before trading is allowed to resume.
Nasdaq has been cited to have compared its request for Volatility Guard to the Liquidity Replenishment Points rule that currently exists on the New York Stock Exchange.
Volguard (company’s philosophy can be traced back to 2012) partakes in the ideology that negative impacts of sudden and unanticipated movements of asset prices i.e. [http://en. .org/wiki/Volatility_(finance) volatility] spikes, should be reduced for the maintenance and growth of healthy markets. In light of modern high speed trading environments and advanced trading technologies, Volguard takes this a step further with the aim of harnessing the resultant, significant volatility for its clients.
Volatility guards form the basis for the safeguard percentages used in the opening and closing auctions on NASDAQ OMX markets. The safeguards in the opening auction are two times that of the dynamic volatility guard while the closing auction's safeguards are the same as the dynamic volatility guard.
Dynamic volatility guards are based off order book levels. They are then disseminated as reference data through the Nordic Workstation and the Genium Consolidated Feed.
NASDAX OMX Nordic holds the right to the application of deviating percentages on order books.

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