November 07, 2007

The NYSE lights the fuse


After the 1987 crash, the markets adopted "trading curbs" for computer trading. Without them, the computer programs would potentially take over.

Well, guess what HP'ers?

The NYSE, for whatever reason, has just eliminated trading curbs on computer trading.

Yes, you heard that right. For no good reason, and with no fanfare, the NYSE has just eliminate these trading curbs. Anyone get the feeling that the insiders are setting this market up for something, well, might they say "interesting"?

Invest accordingly. You're on your own. And the fuse has been lit.

NYSE Eliminates Trading Curbs Dating Back to 1987 (Update1)

The New York Stock Exchange said it will no longer impose curbs on computer-program trading that were put in place after the crash of 1987, claiming they're no longer as effective in damping swings in prices.

The exchange will stop prohibiting brokerages from entering some program trades when the NYSE Composite Index rises or falls more than 2 percent, according to a notice sent to member firms today. The so-called collars had been in effect since 1988 and were triggered 17 times this year, according to a filing with the Securities and Exchange Commission.

25 comments:

Anonymous said...

Arrrggg Matey's!!!!

Me be thinkin' I'll be shortin' the market - much like me short peg leg!!!

Frank@Scottsdale-Sucks.com said...

WTF

HOLY CRAP

ARE YOU KIDDING ME

Greasy said...

*eats popcorn*

Anonymous said...

Don't they know you have to use a condom when having sex with hookers?

Anonymous said...

No need anymore because the PPT has the presses running 24/7.

All hell is breaking lose out there today.

Anonymous said...

Of course they did. How else are you going to recover the losses from all of that bad paper. Change the uptick rule, remove the curbs, and put the beat down on the market like a rented mule. Voila, no more write downs.

cobra2411 said...

Old news... Collars are still in place, but you have to wonder if we're being setup...

I hope so because I'm so short right now that I'm two-dimensional!

LauraVella said...

The markets are still not showing opening numbers after that nasty article on GM came out 2 hours ago.

Is the open really that bad?

streetraider said...

"No need anymore because the PPT has the presses running 24/7."

Is there nothing that can make this market go down? With all the bad news out there I thought there would be a strong reaction, instead with all that came out today and yet the market is still somehow magically stable and hell even some stocks like RIMM are making new highs. Even our good friend Countrywide is only down .20 after the last few day run-up. This is insane, I thought markets were future looking and reflect business sentiment. Looks more like Las Vegas to me everyday.

baddriver said...

be careful, they removed the curbs, but not the circuit breakers. Don't assume too much!

Anonymous said...

My broker/adviser Say's it's always a good time to get in the market.(No sarcasm) Asked about gold and she said it's too risky. What about diversifying out of the dollar? well I don't know anything about that be we do have mutual funds with global exposure.

What too do???

Mike said...

These trading curbs are not the same thing as the market circuit breakers which halt the market and allow investorss time to rationalize their decisions. These only affect individuals using software to make all trading decisions for them. Not that big of a deal. I work in the industry.

Anonymous said...

this does not mean anything. market circuit breakers are still in place.

Anonymous said...

I've never really been much of a fan of trading curbs to begin with. If we are to have a truly free and open market, well then if you don't want to be here... you are free to leave.

Isn't that the way it should be? Besides, the NYSE clearly stated that even if they put in the stops, traders simply routed their sell orders to other exchanges. True, the timing is curious but I'm not sure there's any evil plan afoot here. A little notice would've been nice though? Like 6 mos?

DinOR

Budvar said...

And another thing, the $850 gold price of 1980 in inflation adjusted dollars is getting close to about $2500 in todays money.

keith said...

As I understand it the computer trading curbs have been removed, but the circuit breakers which halt trading for a time have been kept in place

correct?

Veronica Lodge said...

RE: Upcoming stock market crash...

People don't seem to be too concerned when they say:

"Sure, the stock market drops one day, but it always bounces back the next day."

How quickly people forget that the stock market is not a bank, is not FDIC protected and that past performance is no guarantee of future results.

The stock market has crashed before and it will crash again. A crash seems imminent.

V.L.

Anonymous said...

I was wondering why you didn't pick up on this the other day. Not that I am a fan of curbs, it is perplexing, however, that in perhaps the most volatile markets in recent history they remove them, wtf?

Anonymous said...

stock is paper

westwest888 said...

Well, the NYSE is a public corporation for profit. Of course they want more trading so they can make more money. Deregulation it is.

Anonymous said...

Anonymous said...
My broker/adviser Say's it's always a good time to get in the market.(No sarcasm) Asked about gold and she said it's too risky. What about diversifying out of the dollar? well I don't know anything about that be we do have mutual funds with global exposure.

What too do???

November 07, 2007 3:03 PM
-------------
My advisor says the same thing. I have a global fund, that is a small part of my portfolio, and its been outperforming my other holdings. I got burned by gold once. Precious metals are a capstone/minor component to your portfolio once you're diversified in all other areas. So I'd go international first, then put in some sort of precious metal investment. Both are high risk, and at least for precious metals your buying into a high right now so it might be too risky right now.

Tom said...

I think the fact that the curbs have been hit 17 times already this year show that they aren't doing what they were originally intended to do.

Anonymous said...

Well I still don't know what too do. Glad I didn't jump in today though. Think I'll wait a while and just sit in cash.

I know it's going down in value against other currencies but with no basic knowledge of markets, or support you can trust, a knee jerk reaction would be even more foolish. IMO

Anonymous said...

yeh i noticed today on cnbc that they had no curbs on today? what happened? they took them off? why ? why now? hmmm, this smells fishy..

Princess Mononoke said...

Anonymous said...
My broker/adviser Say's it's always a good time to get in the market. What too do???
November 07, 2007 3:03 PM

My advisor says the same thing.
November 07, 2007 6:15 PM

Yes, she's right about not being able to TIME the market. As Ibbotson charts will show you the market has always recovered over time. However, she's wrong to tell you that it's always a good time to get in?!?

She should be asking you how close are you to retirement? Are you risk averse? etc. The market is long term investing. I don't much trust mutual funds anymore.

I would much rather invest in ETFs (ie; QQQ or GLD) or specific company stock. Look around you; what sectors do you see that continue to flourish no matter what? Gaming? Green? Chocolate?

If I may say so, do yourself a favor and find another advisor. Someone who is sincerely looking out for your best interest!