Flash Crash still an issue

The “Flash Crash” of May 6th is still raising question. The idea that stocks can fall 1,000 points in a matter of 20 minutes is cause for concern. Technology has advanced to the point that millions of trades can be made in minutes. And, it seems as if no one reason is to blame.

The SEC has proposed new rules known as circuit breakers. The plan aims at the volatility of individual stocks. A six-month pilot plan tests the new system. If stocks move 10% in either direction in a five minute period, trading is paused for the market makers to step in. The pilot program is set to begin June 14th.

This circuit breaker exists in the NYSE, but could be applied worldwide. The SEC is looking for feedback on the plan they will implement.

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Posted on May 20, 2010, in Market Trends, Newspaper & Journal Articles, Stocks, Bonds, & Funds and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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