Glass
10th August 2011, 07:30 AM
The thread title is from an older incident when they used this rule. That was in 2009. I mistook it for the current story and I can't change it. There are no current reports of Extreme Volatility as being the reason for todays use of the rule. The following story is current. The 2nd story explains the rules purpose.
NYSE Invokes 'Rule 48' To Smooth U.S. Stock Market Open
The New York Stock Exchange early Monday put into effect its so-called "Rule 48," aiming to smooth the opening of U.S. stock trading in what is expected to be a rocky session.
Rule 48 allows designated market makers on the NYSE to refrain from disseminating price indications ahead of the opening bell. The idea is to make it easier and faster to open stocks on days when trading is poised to become especially volatile.
Big Board parent NYSE Euronext (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=NYX) last put "Rule 48" into effect on Jan. 27.
Futures on the Dow Jones Industrial Average pointed Monday to a sharply lower open in the first trading session after Standard & Poor's downgraded the U.S. credit rating.
From WSJ (http://online.wsj.com/article/SB10001424053111904140604576496010452720404.html?m od=googlenews_wsj)
Exactly What is ‘Rule 48′? (background)
If you’re interested. Here’s the text of “Rule 48,” (http://nyserules.nyse.com/NYSETools/PlatformViewer.asp?searched=1&selectednode=chp_1_3_2_5&CiRestriction=%22Rule+48%22&manual=/nyse/rules/nyse-rules/) which the NYSE invoked to smooth the open today[05-20-2010]. Here’s the Cliffs Notes version:
(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of [Designated Market Makers] to arrange for the fair and orderly opening, reopening following a market-wide halt of trading at the Exchange, or closing of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.
(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).
WSJ source (http://blogs.wsj.com/marketbeat/2010/05/20/exactly-what-is-rule-48/)
NYSE Invokes 'Rule 48' To Smooth U.S. Stock Market Open
The New York Stock Exchange early Monday put into effect its so-called "Rule 48," aiming to smooth the opening of U.S. stock trading in what is expected to be a rocky session.
Rule 48 allows designated market makers on the NYSE to refrain from disseminating price indications ahead of the opening bell. The idea is to make it easier and faster to open stocks on days when trading is poised to become especially volatile.
Big Board parent NYSE Euronext (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=NYX) last put "Rule 48" into effect on Jan. 27.
Futures on the Dow Jones Industrial Average pointed Monday to a sharply lower open in the first trading session after Standard & Poor's downgraded the U.S. credit rating.
From WSJ (http://online.wsj.com/article/SB10001424053111904140604576496010452720404.html?m od=googlenews_wsj)
Exactly What is ‘Rule 48′? (background)
If you’re interested. Here’s the text of “Rule 48,” (http://nyserules.nyse.com/NYSETools/PlatformViewer.asp?searched=1&selectednode=chp_1_3_2_5&CiRestriction=%22Rule+48%22&manual=/nyse/rules/nyse-rules/) which the NYSE invoked to smooth the open today[05-20-2010]. Here’s the Cliffs Notes version:
(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of [Designated Market Makers] to arrange for the fair and orderly opening, reopening following a market-wide halt of trading at the Exchange, or closing of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.
(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).
WSJ source (http://blogs.wsj.com/marketbeat/2010/05/20/exactly-what-is-rule-48/)