Program trading has caused some serious declines in the market, most notably in 1987. The SEC instituted circuit breakers to prevent catastrophic collapse of the market. Securities exchanges are likely to institute program trading restrictions before the government further regulates them.

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Program Trading

Question 72

Multiple Choice

Program trading

A) means that when a given market indicator reaches a certain point, a large sale or purchase of securities may take place.
B) has been argued to affect the market by accelerating price movements.
C) is likely to be voluntarily restricted by the securities exchanges and their member firms.
D) All of the above

Correct Answer: