Market Disruption Event

A market disruption event is a condition defined in advance in a client agreement, on the occurrence of which normal pricing and execution are treated as unavailable: the underlying market suspends trading, a venue's feed stops, an instrument becomes untradeable, or liquidity thins to a point where the firm says it can no longer quote. Naming the conditions in the contract is what lets the relationship switch to a different set of rules without either side first having to argue about whether the market was genuinely broken. What the clause then permits is the half that reaches an open position. The powers listed are usually some combination of widening spreads, suspending or refusing orders, changing margin requirements, valuing a position at a price the firm determines, and closing it. Each is a change to the terms being traded on, applied at the moment they are hardest to plan around, and none of them requires the market to have stopped altogether — the trigger is whatever the definition says it is, which is why the definition rather than the list of powers is the part that decides how often the clause can be reached for.