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New "Circuit Breaker" Imposed To Stop Market Crash
Lucas123 writes "The SEC and national securities exchanges announced a new rule that would help curb market volatility and help to prevent 'flash crashes' like the one that took place on May 6, when the Dow dropped almost 1,000 points in a half hour. That crash was blamed in part on automated trading systems, which process buy and sell orders in milliseconds. The new rule would pause trading on individual stocks that fluctuate up or down 10% in a five-minute period. 'I believe that circuit breakers for individual securities across the exchanges would help to limit significant volatility,' the SEC's chairman said. 'They would also increase market transparency, bolster investor protection, and bring uniformity to decisions regarding trading halts in individual securities.'"
I'm so saddened by these stories about stock traders getting electrocuted. It was about time they added circuit breakers.
There's no -1 for "I don't get it."
This regulation will only strangle growth and innovation, slowing our economic recovery. But I guess it's easier to carry out a regulatory vendetta than it is to appreciate that the simple, universal truths of Austrian economics.
No you are just limited by your imagination.
For one thing, I didn't say hundreds of millions of events affect a company, I said that all those occur and out of all of those, a couple of them are likely to affect PERCEPTION of the company.
Nor am I failing to account for knowledge of those events. One does not even need to be directly aware of the event, it need only be reflected in something that the trading system is aware of - like the change in the value of the shares of another company in a similar market. Same thing on your analysis critique, more failure think it all through.
And so what if it takes minutes to find out after the fact - it doesn't matter how much time passes between the event happening and your knowledge of it, only the difference in time since you gained knowledge of the previous event. It's a pipeline.
When information is power, privacy is freedom.