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AP
US stock exchanges would briefly halt trading of some stocks that have big prices swings under new trading rules aimed at avoiding market plunges and proposed by federal regulators.
The rules would take effect in mid-June under a six-month pilot program agreed to by major exchanges and the Securities and Exchange Commission. The SEC announced them Tuesday and put them forward for public comment, in a response to the stunning plunge of May 6.
Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 per cent or more would be halted for five minutes. These rules, known as "circuit breakers," would be applied if the price swing occurs between 9:45 am and 3:35 pm Eastern time. That's almost the entire trading day.
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I wonder what happens if after 5 minutes, price continues to fall. Halt again and again and again?
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