What to Do, or Not Do, About the Markets

Posted: 13 Feb 2018

Date Written: June 30, 1988


There has been considerable finger pointing since the Crash, much of it devoted to the tail wagging the dog idea. This concept may be typical of many that will influence regulators and exchanges as they decide what new measures to adopt to prevent another Crash. It is wrong and it misses the point.

The wide pre-October use of futures and options demonstrates that investors want them. All the same, their future is in the hands of these regulators and exchanges.

I do not know what the future of the markets is, because I do not know what measures the regulators and exchanges will adopt. The outlook, however, is poor to the extent that deleterious measures are implemented. This paper puts the most popular current proposals in their proper perspective - idiotic.

Keywords: market crash, price limits, market closure, trading halt, position limits, market stability

JEL Classification: G00, G01, G10, G14, G18

Suggested Citation

Ferguson, Robert, What to Do, or Not Do, About the Markets (June 30, 1988). Journalof Portfolio Management, Vol. 14, No. 4, 1988. Available at SSRN: https://ssrn.com/abstract=3114232

Robert Ferguson (Contact Author)

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