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Forums > General Investment Discussion > Topic: Something Worth Discussing?

Sep 16th 2007, 19:21
Silverblade Dagger 		Something Worth Discussing?
In light of the recent closings and suspiciously fluctuating stock prices, what would be everyone's thoughts about having a sort of circuit breaker for trades?

By "circuit breaker", I mean a system that pauses trading for a set time if the stock prices go past a set percent of the buy/sell prices. Essentially, similar to how the Lindex will stop trades if the price goes past 10,20, and 30% within a 12 hour time frame.

Now, I'm not a financial expert by any means, but I can see this in two ways. The first, is that it would prevent people from buying/selling stock at an obscene amount as witnessed recently. It's not to say that trading between alts would be stopped by this, but it could deter quick pump-n-dump.

The second way I see this would be that it can hamper honest trades as well as those trying legitimately to get off a sinking ship, and perhaps constrict value or legitimate growth. It might also be a problem as volume increases as more traders and investors come into the fold.

That's how I see the pros and cons of a circuit breaker, and I could be wrong in my thinking about this. So I'd like to know what everyone's thoughts are on the idea, seasoned investor or just rezzed yesterday. Maybe it is something Arbitrage and the gang can look into, or not. If anything, it can't hurt to discuss it and show each angle of it.

So... yes to a "circuit breaker" and why?
Or... no to a "circuit breaker" and why?

Perhaps it can be educational for people like me here on SLCapEx.

Honoris Causa...
Silverblade Dagger
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Sep 16th 2007, 19:46
Isegrim Nikolaidis 		Re: Something Worth Discussing?
I believe that this topic was mentioned earlier on one of the forums. Most responces did not favor the implementation of a ciruit breaker. But opinions change as fast as the stockprices.

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Sep 16th 2007, 19:52
King Broome 		Re: Something Worth Discussing?
I think this has been discussed before. If a company is going to bankrupt, you don't want any circuit breaker, you'd want to liquidates as fast as possible.
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