|
PureBytes Links
Trading Reference Links
|
I would tend to agree that this would serve to potentially reduce volatility, not increase it! The limits in Nasdaq 100 futures just 6 months ago were over 100 points ANYWAY. So, I think they are probably eliminating the 2.5% because versus what they're used to the current first-tier limit has become quite small (comparatively) due to the devaluation of the markets. Limits cause artificial blocks. When approached, traders anticipate them to cover longs, increase shorts, and stamp through the limits to cover real cheap on the panic when the limits are released. Does that decrease volatility? The only real protection it would offer is in the case of an explosive move like the surprise fed report when market stops hit off 100+ points above (for Nasdaq at least) because there were no contracts to sell way up there on the books. And as you saw, it still didn't kick in that case ANYWAY! Just a thought...
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|