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Finance: What is the Fast Market Rule? 11 Views


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Description:

What is the Fast Market Rule? The fast market rule is something that is used in the U.K. to keep the market under control when any sort of crash happens. It allows big traders and firms to trade outside of quoted trading ranges so that huge changes in price do not have as big of an effect.

Language:
English Language

Transcript

00:00

Finance a la shmoop what is the fast market rule? okay things get crazy here [Two guys riding a rollercoaster]

00:08

whoa and every now and then there's a leap well blimey, that's how things work

00:14

here on the London Stock Exchange.....

00:18

the fast market rule accommodates the chaos by giving brokers and other market

00:23

makers the freedom to trade outside the ranges published to the exchange why is

00:28

this needed? well because we live in a world of robots and artificial

00:33

intelligence and fat thumbs that hit the wrong keys and hackers from Russia China

00:38

and Mars all of whom can profit from chaotic disruption if you want to see

00:44

this phenomenon in its finest form well check out Jack Nicholson in the original [Man stood next to Jack Nicholson as Joker]

00:48

Batman movie and that was the best one so the logic revolves around the fact

00:51

that today even with all our massive computing power we would still rather

00:56

rely on human beings when you know the congressman hits the fan then assume

01:01

that a computer will be clever enough to figure out what's wrong quickly you know

01:06

when the world is on a collision course with chaos all over the place fast [Meteor strikes Earth]

01:10

market rule, humans over robots...

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