The SEC is supposedly trying to rein in Flash Trading with a new rule, calling it circuit breakers. Below the SEC press release:
Washington, D.C., May 18, 2010 — The Securities and Exchange Commission announced that in response to the market disruption of May 6, the national securities exchanges and the Financial Industry Regulatory Authority (FINRA) are filing proposed rules today under which they would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period.
The SEC is seeking comment on the proposed rules.
The markets are proposing these rules in consultation with FINRA and staff of the SEC to provide for uniform market-wide standards for individual securities in the S&P 500® Index that experience a rapid price movement.
These rules reflect a consensus that was achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened a meeting of exchange leaders and FINRA at the SEC early last week. That meeting took place within days after the market dropped significantly and after approximately 30 S&P 500 Index stocks fell at least 10 percent in a five-minute period.
Remember last week when the Dow went nuts and dropped almost 1000 points?
Reuters is reporting the myserty is solved and if true, is almost worse than the speculations. It was a hedge fund, money manager Waddell & Reed Financial Inc., selling e-mini contracts. They run a $22.1 billion fund.
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