Curbs Ingreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
What does 'curbs in' mean. I have been watching market news for some time now. I have never seen this before. You know the little box at the lower right hand corner of the screen. Today the Dow was tumbling and the little box had 'curbs in' on top.
-- canthappen (email@example.com), February 11, 2000
The "curbs" are special impediments to control computer-initiated (automatic) sell-offs. Supposed to forestall crash.
-- james hyde (firstname.lastname@example.org), February 11, 2000.
NYSE Trading Curbs
Whenever CNBC runs a banner on your television screen that says "Curbs In", we receive a ton of email from investors asking "What are curbs?" Here is the answer for you:
Program Trading "Collars"
A collar on program trading firms instituted by the NYSE is most commonly referred to on CNBC as "Curbs In". The Exchange applies program trading curbs whenever the Dow Jones Industrial Average moves 220 points higher, or 220 points lower than the previous day's closing price. The NYSE restriction on program trades stays in place until the Dow Jones returns to within 110 points of the previous day's closing price; or, until the end of the trading day at 3:00 CT. The restrictions will be re-imposed each time the Dow Jones advances or declines 220 points. NYSE Trading Curbs apply only to our firm's (and other program trading firm's) computer assisted program trades.
The NYSE defines a Program Trade as:
1. A basket of 15 or more stocks from the Standard & Poors 500 Index.
2. A basket of stocks from the Standard & Poor's 500 Index valued at $1 million or more.
Once the NYSE program trading collar is in place, Program Selling can be executed only on an up-tick. That means that the last trade was executed at a higher price than the trade before it. Program Buying can be executed only on a down-tick. That means that the last trade was executed at a lower price than the trade before it...
-- DeeEmBee (email@example.com), February 11, 2000.
DMB, thanks very much. Might you give more light on this? I have always appreciated your contributions to this board. I changed my name and address after reading that thread about the NYT guy reading us. Man, was I naive. Hehe.
-- canthappen (firstname.lastname@example.org), February 12, 2000.