14
Sep, 2010
14
Sep, 2010
NUE…yet another errant circuit breaker pops
100 shares of NUE traded at $0.01 today at 11:52am. The trade happened on the very light volume CBOE Stock Exchange. This 100 share trade was obviously an error but it caused a halt of 5 minutes in a stock that has so far traded 5mm shares today. These errant circuit breaker pops are getting way too common and we have already lost track of how many have been popped since the SEC unveiled the pilot program. But we can expect even more now since the SEC expanded the pilot program to 1000 securities last week.
In a comment letter to the SEC (http://www.sec.gov/comments/sr-nyse-2010-49/nyse201049-2.pdf), we urged the SEC to consider more factors than just one trade before halting a stock. Before halting a stock, we had two recommendations: 1) minimum number of trades at the threshold level must occur 2) the National Best Bid/Offer should be checked to see if the current inside quote is consistent with the trade(s) that caused the trading pause.
Don’t they realize how easy it is for a trade like this to occur on one of the low profile exchanges by accident OR by design?
Not having a sanity check in there from day 1 shows us how ill informed these folks really are.