Circuit breakers to halt stocks on drops but not on rallies!!! WTF!!!!

Discussion in 'Wall St. News' started by S2007S, May 11, 2010.

  1. S2007S


    So they will halt stocks on the way down but a stock rising 10-20-30% in a day will be just fine, where are the free markets?

    This is just fucking unreal at this point, I think they might have let these markets do such a thing last thursday in order to implement this system into place. This is just getting more pathetic by the day.

    US Single-Stock Circuit Breakers Deal Done: Source
    Published: Tuesday, 11 May 2010 | 10:54 AM ET
    Text Size
    By: Reuters

    Adopting new, U.S. market-wide circuit breakers to halt precipitous drops in individual stocks is "a done deal," a source said Tuesday, five days after a severe market plunge rattled investors and perplexed regulators.


    The circuit breakers would likely trip when individual stocks fell by a set amount in a set time frame.

    The Securities and Exchange Commission hosted exchange heads at a meeting Monday, and said afterward the parties agreed to a framework that would strengthen circuit breakers.

    The report comes as senior executives from NYSE Euronext [NYX 30.82 0.09 (+0.29%) ], Nasdaq OMX Group [NDAQ 19.84 0.22 (+1.12%) ] and CME Group [CME 332.545 -0.455 (-0.14%) ] will testify to a congressional panel on Tuesday on last week's shock sell-off in the stock markets, according to a witness list obtained by Reuters.

    Slated to testify are NYSE Euronext Chief Operating Officer Lawrence Leibowitz, CME Executive Chairman Terrence Duffy and Nasdaq Transaction Services Executive Vice President Eric Noll, according to the list.

    Also appearing will be U.S. Securities and Exchange Commission Chairman Mary Schapiro and U.S. Commodity Futures Trading Commission Chairman Gary Gensler, it said.
  2. why would you want to kill volatility on both sides?
  3. prices always fall faster then they rise - it would be stupid to treat both directions the same when they are not.
  4. Occam



    I think you've got a very good point, even though I generally agree with the "individual circuit breakers" idea. One alternative would be to halt stocks with a bid/ask spread above a certain level, determined by some formula on a per-stock basis, then re-opening them later. But then again, there's probably potential problems with that idea, too :D
  5. How long have us conspiracy nuts been saying that this market is protected from any downside? (see Greenspan Put / Bernanke Put)

    They are just codifying into law policy created under Reagan.