Re: 1000 Point Drop Most likely Was Financial Terrorism - Homeland Security!!!!!!!!!!
[url]http://www.ft.com/cms/s/0/c5a024ba-7992-11df-85be-00144feabdc0.html[/url]
someone's gonna go to the PMITA Prison
'Circuit breakers' tripped for the first time
By Michael Mackenzie in New York
Published: June 16 2010 23:18 | Last updated: June 16 2010 23:18
The S&P 500 circuit breakers, which began operating this week, were triggered for the first time on Wednesday afternoon when shares in the Washington Post Company doubled in price inside the space of one second.
Shares in the publisher were trading at about $460 at 3.07pm yesterday when an order for 400 shares and 200 shares were both executed at $919.18, followed by 166 shares at $929.18.
EDITOR’S CHOICE
Analysis: Stock markets – that sinking feeling - Jun-01.On Wall St: Vital lessons of the ‘flash crash’ - May-14.NYSE circuit breaker roll-out delayed by SEC - Jun-04.Calls grow for futures-style curbs to stock swings - Jun-10.Quick View: US looks at European-style circuit breakers - May-19.CFTC chief eyes circuit breakers for safety - Jun-03..These transactions along with various orders of 100, 200 and 500 shares between $456.91 and $462.85 all took place within one second.
The trades were executed on the New York Stock Exchange’s Arca electronic trading platform and they automatically triggered the newly implemented circuit breakers.
Under the new rules, trading in an S&P 500 stock is halted if the price either rises or falls by 10 per cent inside a period of five minutes.
“There was a trading halt of five minutes and it was determined that there was an erroneous print for the 766 shares that traded,” said Ray Pellecchia, spokesman for NYSE Euronext.
“We are waiting to find out what caused the prints,” he added.
The NYSE finalised its roll-out of the S&P 500 circuit breakers yesterday and the Washington Post Company was included in the last group of companies.
The move to implement circuit breakers for highly liquid stocks was the major regulatory response after the “flash crash” where some 10,000 trades in stocks and exchange traded funds were cancelled.
The circuit breakers are designed to forestall dramatic changes in the price of a stock and prevent erroneous trades.
Jeffrey Rubin, analyst at Birinyi Associates, said the erroneous trades in Washington Post shares revealed the shortcomings of the circuit breakers.
“The new rule is not the correct cure for the disease as the majority of erroneous trades occur immediately following allowable trades and hence the stock is still allowed to trade well in excess of the 10 per cent threshold,” he said.
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