John Carney writes: The idea of having a kill switch for
major national exchanges sounds smart.
There should be ways to shut down trading by firms that seem
to be suffering from giant trading errors, such as the flood of erroneous
orders sent out by market maker Knight Capital Group last June.
The problem with kill switches is that someone needs to
throw them. My own sources say that while the Knight incident was underway,
people at Knight hesitated when it came to pulling the plug on the automated
trading. They more or less had a kill switch or panic button but refused to
press it.
What's needed, really, is a kill switch that doesn't sit at
the broker-dealer but at the exchanges themselves. That's what's currently under
consideration…..
Find out more at http://www.cnbc.com/id/100717437
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