Trading Curb
Categories: Trading
Sometimes things get wacky and you just have to say "Whoa...let's take a minute to think this over." Like...someone bumps into you at a bar. You're about to break a bottle and stab the guy in the neck with the jagged glass. But then...something inside you tells you to chill out for a minute, take a deep breath, and count to ten. And maybe look into anger management classes.
Trading curbs provide the same function on financial markets. They act as circuit breakers when the market either rises too quickly or falls too sharply. If the market moves more than a certain amount in a session, the trading curbs will turn on. Trading then halts for a short period of time, giving traders a chance to breathe and count to ten.
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Finance: What is the Fast Market Rule?11 Views
Finance a la shmoop what is the fast market rule? okay things get crazy here [Two guys riding a rollercoaster]
whoa and every now and then there's a leap well blimey, that's how things work
here on the London Stock Exchange.....
the fast market rule accommodates the chaos by giving brokers and other market
makers the freedom to trade outside the ranges published to the exchange why is
this needed? well because we live in a world of robots and artificial
intelligence and fat thumbs that hit the wrong keys and hackers from Russia China
and Mars all of whom can profit from chaotic disruption if you want to see
this phenomenon in its finest form well check out Jack Nicholson in the original [Man stood next to Jack Nicholson as Joker]
Batman movie and that was the best one so the logic revolves around the fact
that today even with all our massive computing power we would still rather
rely on human beings when you know the congressman hits the fan then assume
that a computer will be clever enough to figure out what's wrong quickly you know
when the world is on a collision course with chaos all over the place fast [Meteor strikes Earth]
market rule, humans over robots...