CAPEX has become the fore-runner in encouraging market responsibility and implementing market controls to prevent the radical manipulation of prices of shares and to prevent market abuses. As part of this ongoing process they are now implementing circuit breakers at 50% changes of trading value to allow investors to reconsider how they are pricing their shares in the market and to allow exchange heads to ensure that the reason for price changes are in fact legitimate and fair market forces versus manipulations.
CAPEX is the first market to use these tripwires to protect investors and hopefully it will continue to advance its leadership in market regulation, fraud prevention, and investor protection measures. I would encourage all markets to follow this lead.
Saturday, November 17, 2007
CAPEX Implements Circuit Breakers
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3 comments:
While I agree with and greatly appreciate your opposition to naked shorting in RL investment, and ACE is following your lead in its options by mandating, when implemented, all options be covered. However, I'd like to see some greater elucidation about why tripwires are really necessary. And if you are going to advocate such, why not also advocate controls to limit the size of capping orders too? Forced lack of volatility is just as bad as excessive volatility.
I agree we need some elaboration about what goes into the circuit breaking equation. I also think that there needs to be some way for investors to place orders while the breakers are still in place, because otherwise the problem that caused the halt will be there when the trading resumes.
That sounds reasonable to me, Guardian-- users should be able to place limit orders even when the stock is on breaker hold.
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