| TRADING CURBS are a means by which to take the fervor out of the market that is moving too fast to maintain a reasonable balance of market orders. |
| When the curbs are in place, the market stops accepting floor trades. The outstanding orders are crossed until the imbalance is corrected and then there is a "cooling off" period of X amount of minutes. After this the market is again reopened for floor trades and the movement is again monitored. If the limits are exceeded, then the curbs are again activated. Presently the curbs are set at a value of the market and it is being argued that it should be set at a percentage of the market instead. ( We agree that the curbs should be a percentage as well. ) |
| The sudden move causing the curbs to be activated, is generally caused by program trading, and it can shut the market down for quite some time. There are occasions where the curbs will be lifted, only to be put back in place a few minutes later. |