Can This Happen Again?

The SEC made several recommendations based on conclusions drawn from the events of May 6, 2010.

  • The first move, and probably the one with the most impact on the markets, was the implementation of a volatility-based trading pause program on stocks and ETFs.10 The SEC has piloted a program aimed at stemming a recurrence of these events. The pilot was meant to last only through December 2011 but has been extended several times. It will work as follows:

    image For stocks that are subject to the circuit breaker program, trades will be broken at specified levels, depending on the stock price, between 9:45 a.m. and 3:35 P.M.

    For stocks ...

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