Speed Traders Propose ETF Fix to Prevent Repeat of Aug. 24 Rout

[Banjo]

Group writes to SEC, says changes would keep trading orderly
Chaos in ETFs was a key problem during last month's rout

http://www.bloomberg.com/news/artic...pose-etf-fix-to-prevent-repeat-of-aug-24-rout

 

[jsp326]

Oh, please. 6 years of stimulus, ZIRP and QE pushed stocks to levels where they had no business. There's no excuse or explanation needed for last month's rout.

 

[i960]

The problem with ETFs or other abstract baskets of things is that if components of the basket are halted than the basket itself also has to be halted. The current CBs only account for single stocks and do not account for relationships whatsoever.

 

[m22au]

The problem with ETFs or other abstract baskets of things is that if components of the basket are halted than the basket itself also has to be halted. The current CBs only account for single stocks and do not account for relationships whatsoever.

I doubt that is workable in practice.
Examples:
if a S&P 500 component is halted, then does that mean the SPY also has to be halted?
if a Russell 2000 component is halted, then does that mean the IWM also has to be halted?

.