3 ms·
> These rules are designed to slow trading down If this were true, then there would be a symmetric rule to restrict purchases when prices increase. Since the
by panarky 8y ago
> These rules are designed to slow trading down
If this were true, then there would be a symmetric rule to restrict purchases when prices increase.
Since the rule only restricts sales and not purchases, its purpose must be to prevent price declines, not to regulate the velocity of trading.
- slededit 8y agoUnlike with upswings, down swings come with margin calls which can cause downward spirals. The market can certainly get irrational on the upswing as well but the feedback mechanisms are more muted and slower.