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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: LTK007 who wrote (83983)	7/21/2007 4:36:11 PM
From: Real Man	Read Replies (1) of 110194

There is another way of looking at this - the uptick rule really seems to be a hurdle to arbitrage, since no such rule exists in the futures markets. sec.gov Overall, there seems to be some protection against large declines. Collar Rule Under NYSE Rule 80A, if the DJIA moves up or down two percent (2%) from the previous closing value, program trading orders to buy or sell the Standard & Poor’s 500 stocks as part of index arbitrage strategies must be entered with directions to have the order executions effected in a manner that stabilizes share prices. The collar restrictions are lifted if the DJIA returns to or within one percent (1%) of its previous closing value. The 2% collar rule threshold is set by the NYSE at a point level that is calculated at the beginning of each quarter. For example, on April 1, 2007, the average value for the DJIA for the preceding month (March 2007) was used to calculate a point level (rounded to the nearest 10 points). This resulted in the 2% collar rule threshold being set at 180 points.

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