Circuit Breakers.

24/7 Wall Street on changes to the market circuit breaker rules.  Bet you didn't know there were any!  {Excerpt}

"The Securities and Exchange Commission has announced that the national securities exchanges and FINRA are filing proposals in a move to revise the current stock market circuit breakers in an effort to address extraordinary volatility in the markets. If implemented, the new circuit breakers will halt all exchange-listed securities trading in the U.S. markets. After the Flash Crash of 2010 and with the proliferation of how much the trading machines dominate the markets now, this needed to be done.

The thresholds will lower the broad market decline percentage triggers, shorten the duration of the trading halts, and also change the reference index. The existing market-wide circuit breakers were originally adopted in October 1988 and have only been triggered on one day in 1997.

The basic proposals are as follows:

•Lower the market decline percentage thresholds from 10%, 20%, and 30% down to new levels of 7%, 13%, and 20% from the prior day’s closing price.

•The duration of the trading halts that do not close the market for the day would go from 30 minutes, 60 minutes, or 120 minutes down to 15 minutes.

•Rather than six time periods, the only two relevant trigger time periods would be before 3:25 P.P. and on or after 3:25 P.M.

•The new proposal would strip the Dow Jones Industrial Average as the reference index and would change to the S&P 500 Index as the pricing reference.".......

My comment:  Perhaps it's someplace in the proposal and I just didn't see it but I think the best circuit breaker would be to bring back the uptick rule!

*Long ETFs related to the Dow Jones Industrial Average in client accounts.  Long ETFs related to the S&P 500 in client and personal accounts.

Link:  Circuit Breaker Proposals.