NYSE to eliminate stop loss orders
The New York Stock Exchange has announced that from February 26 it will not allow stop loss orders.
I've double checked my calendar ... today is not April Fools' Day ... yes, this is real. (Or is it? Seems insane to me, but there you go.)
- Investors will not be able to make "stop orders" and "good till cancelled orders" on the New York Stock Exchange and NYSE MKT from Feb. 26
- On Aug. 24, people had standing "stop orders" that they thought would protect them, but the shares crashed through the "stop orders" and investors were automatically sold out of positions at prices well below where their "stop order" stood
- "We expect our elimination of stop orders will help raise awareness around the potential risks during volatile trading"
Have you heard the argument about improving the safety of cars and the 'law of unintended consequences'? That, with airbags, ABS (anti-skid brakes) etc. drivers actually drive faster and less safely because they believe they are safer.
And, thus, it would be better to have a bayonet pointing at the drivers chest mounted on the steering wheel hub ... that would improve driving skills.
This 'no more stop loss' orders seems to be along those lines. No?
ps. No word from the NYSE on anything to deal with traders who place and cancel a billion orders a second. They are still encouraging that behavior.