NYSE Rule 48 - what is it?

Scott DeWar

Prof. Emeritus-Supernatural Events/Countermeasure

• Aug 26, 2015

• #1

If you are like me and saw in the news that they NYSE invoked 'rule 48' 3 times and got the sense it was a rare event

and

when you tried to google it to find out what it is but could not find an informative link on it for 30 minutes,

*-here -*

is a link I found. I will read it later to see what has transpired, but I am feeling like this is something I should be concerned about. I just wanted to be helpful to others here.

 

Last edited: Sep 4, 2015

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Dannyalcatraz

Schmoderator

Staff member

Supporter

• Aug 26, 2015

• #2

I think Rule 48 was used when there were some market slides triggered by automated trading programs a while back. Essentially, it's the emergency brake.

 

Scott DeWar

Prof. Emeritus-Supernatural Events/Countermeasure

• Aug 27, 2015

• #3

to prevent another black tuesday?

 

Dannyalcatraz

Schmoderator

Staff member

Supporter

• Aug 27, 2015

• #4

Basically.

You don't want a plane on autopilot when it's nose is pointed at the ground & accelerating- you want a brain recognizing that's a bad idea manipulating the controls.

So if it looks like the automated trading programs are going on a crazy run, they shut them down. There are probably OTHER reasons R.48 could be invoked, but that's the first to spring to mind.

 

Scott DeWar

Prof. Emeritus-Supernatural Events/Countermeasure

• Aug 27, 2015

• #5

like a circuit breaker on a dead short, then.

 

Homicidal_Squirrel

Adventurer

• Aug 27, 2015

• #6

Scott DeWar said:

like a circuit breaker on a dead short, then.

Click to expand...

No, it seems it's the opposite. It's more like they take the breaks off.

Unlike a circuit breaker that stops stock trading, Rule 48 speeds up the opening by suspending the requirement that stock prices be announced at the market open. Those prices have to be approved by stock market floor managers before trading actually begins. Without that approval, stock trading can begin sooner.

Click to expand...

 

Scott DeWar

Prof. Emeritus-Supernatural Events/Countermeasure

• Aug 27, 2015

• #7

That is a bit of a trick to do. Much like spinning plates while herding kittens

 

Dannyalcatraz

Schmoderator

Staff member

Supporter

• Aug 27, 2015

• #8

My bad- I was clearly thinking of a different regulation.

 

Homicidal_Squirrel

Adventurer

• Aug 28, 2015

• #9

Dannyalcatraz said:

My bad- I was clearly thinking of a different regulation.

Click to expand...

Were you thinking of Rule 34?

 

Dannyalcatraz

Schmoderator

Staff member

Supporter

• Aug 28, 2015

• #10

Phew...thank god no!