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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: eddie r gammon who wrote (10483)	11/5/1998 4:16:00 PM
From: MythMan	Read Replies (1) \| Respond to of 86076

>>NEW YORK (Reuters) - The New York Stock Exchange Thursday reset the thresholds governing the restriction of index arbitrage trading, or trading "collars," and eliminated the related "sidecar" rules that restrict program trading. The exchange said index arbitrage -- a kind of program trading pegged, for example, to price discrepancies between baskets of stocks and futures indices such as the Standard & Poor's 500-- won't be restricted until the Dow Jones industrial average gains or loses 2 percent or more from its previous closing level. The change rids the exchange of its current rule that puts "collars" on trading if the Dow is up or down 50 or more points. The 2 percent "band" was also wider than expected. The new 2-percent rule allows for the resumption index arbitrage trading if the Dow comes within 1 percent or less of its previous close. Traders, especially futures traders, found the rule to be frustrating and outdated because of the stock market's increased volume and volatility. The NYSE said its board of directors also eliminated the related "sidecar" provisions that currently restrict program trading orders when the S&P 500 futures contract drops 12 points from its previous day's close. Both amendments will go into effect following approval by the U.S. Securities and Exchange Commission, the NYSE said .<<