SEC Proposes Stock Circuit Breakers To Avoid Flash Crash

SEC Proposes Stock Circuit Breakers To Avoid Flash Crash

www.rttnews.com

(RTTNews) - The U.S. Securities and Exchange Commission filed proposed rules on Tuesday, under which stock exchanges would pause trading in certain individual stocks if the price swings 10% or more in a five-minute period. The move is aimed at avoiding market disruptions like the one on May 6, when the Dow Jones Industrial Average plummeted nearly 1,000 points and briefly erased about $1 trillion in value, before it rebounded within a few minutes.

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I was just wondering- why else would they be doing this? Everyone knows that the stock market fell by 1,000 points because they lost confidence because of the Greek debt confidence. I fail to see how stopping trading would let the stock market regain confidence- when usually things like this last for a while. It's better for stock markets to just recoup after a loss like that, than, to ban trading altogether.

Does anyone else think this is just a government power grab?

www.rttnews.com
(visit the link for the full news article)