Stock market volatility in August and other so-called mini
flash crashes should not be assimilated with the Dow
Jones’ plummet and recovery over 20 minutes on May
6 2010, warned equity market participants.
Measures that securities regulators are looking at
to dampen volatility and maintain liquidity in equity markets
include trade pauses under the limit-up/limit-down proposal,
and more extensive market maker obligations.
Last week the Securities and Exchange Commission
(SEC) also proposed updating its market wide circuit breakers.
Speakers at Securities Industry and Financial
Markets Association’s (Sifma) market structure
conference on September 21 urged that comparing less drastic
price movements with the May 6 flash crash is counterproductive
for equity market reform.
"May 6 was probably a...