NYSE Circuit Breakers

09 Nov 2011 19:08 #1 by ScienceChic
Did you know they did this?

http://usequities.nyx.com/markets/nyse- ... t-breakers
NYSE Circuit Breakers

In response to the market breaks in October 1987 and October 1989 the New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence. By implementing a pause in trading, investors are given time to assimilate incoming information and the ability to make informed choices during periods of high market volatility.

These trigger points were hit only once on October 27, 1997, when the DJIA was down 350 at 2:35 p.m. and 550 at 3:30, shutting the market for the remainder of the day.

"Now, more than ever, the illusions of division threaten our very existence. We all know the truth: more connects us than separates us. But in times of crisis the wise build bridges, while the foolish build barriers. We must find a way to look after one another as if we were one single tribe.” -King T'Challa, Black Panther

The truth is incontrovertible. Malice may attack it. ignorance may deride it, but in the end, there it is. ~Winston Churchill

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09 Nov 2011 19:33 #2 by FredHayek
Replied by FredHayek on topic NYSE Circuit Breakers
I think this is a good idea. The commodities exchanges have done this for years. If prices rise too high or fall too fast, all trading is halted. Markets are like herds and sometimes they stampede to the exits. Better to stop trading and let people sleep on the news and decide if it is really that bad or that good.

Thomas Sowell: There are no solutions, just trade-offs.

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10 Nov 2011 07:34 #3 by BearMtnHIB
Replied by BearMtnHIB on topic NYSE Circuit Breakers
Yes I was aware of the circuit breakers and I am 100% opposed to them. The market should be able to operate without this kind of interference.

This does nothing but restrict our ability to trade in and out when we want.

Very bad idea. I won't spend all my time fighting it though- there are many other more important government generated intrusions of higher import.

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10 Nov 2011 07:45 #4 by LOL
Replied by LOL on topic NYSE Circuit Breakers
Yes I remember those and the 1987 crash. They really haven't been triggered enough to determine if they will do any good. I think they just closed the stock market on 9/11 before these triggers would have even tripped!

There are also markets around the world that may not be coordinated with these and provide other ways to trade financial instruments.

Also, commodity exchanges play with margin requirements to stop bubbles- see Silver earlier this year.

So when are there going to be shares of 285bound traded on the NYSE ? :)

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10 Nov 2011 09:13 #5 by Reverend Revelant

Joe wrote:
[snip]

So when are there going to be shares of 285bound traded on the NYSE ? :)


When all the liberals leave.

Waiting for Armageddon since 33 AD

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10 Nov 2011 09:30 #6 by Blazer Bob
Replied by Blazer Bob on topic NYSE Circuit Breakers

Joe wrote: Yes I remember those and the 1987 crash.


I remember black Monday. I called my broker and bought t. I always wanted a piece of Bell Labs. It would have been a brilliant move except that it was a market order. I should have put a limit. Stock price was in free fall and I got screwed by the MM.

Later sold at a loss, another mistake.

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