My understanding is that when the indexes are up/down by 200 points program trading on NYSE is automatically "curbed" - shut off. Is this still the limit? If so, I'm curious to know if exchange regulators are sweating enough right now to possibly change it for monday...
What I'd like to know is how is this prohibition enforced? Ok everyone, shut off your computers and NO peeking?
Program trading is strictly controlled by NYSE and maybe the SEC might even take a look at it sometimes...not that they'll ever do anything worthwhile...but NYSE tightly controls it. Their business model depends on it, and when programs REALLY fuck everyone else, there are a lot of people who are very pissed off. Besides, it's pretty obvious when a program is triggered, so in the unlikely event one did go off when it wasn't allowed to, the offender would then have to say "sorry! I fucked up!" and the authorities will say "bad program traders!!! shame on you!!!" and that'll probably be the end of it. As you can tell, I'm trying to learn more myself.
I know in the options world some exchanges are trying to prevent computer generated orders from upending the monopoly the official market makers have on the floor. However automated trading by arbs and market makers in futures are common esp in the electronic products. Can someone explain how computer trading relates to the options controversy?