That's ridiculous, as the title suggests, people will just hard code stops in and be less secure because now there's risks of power outages/internet service causing the algos to not work.

"NYSE makes it harder to get out when shit hits the fan"

@Justin - I would just say that the NYSE is doing what all exchanges do protect the members. The exchanges exist for the benefit of the members.

Justin's absolutely correct.

Exchanges also exist for the benefit of themselves, and NYSE simply wants to outsource the liability that providing stop-loss orders themselves creates.

I use stops to add discipline. So when your long 50 calls go south ,and you get stopped out of 20 of them with the usual lousy execution, it forces you to pay attention and work on proper limit orders.

But admit it, they are nice for going to the washroom.

Also, no stop limits = more volume. Guess why .

I'm with Stephane in this one; I think this route was chosen because it will likely result in more volume. Not saying that the exchange doesn't have the right to make money when they see an opportunity, but this like it's not really about the greater good. Maybe I am wrong, but the veil feels awfully thin here.

Something is going on with the exchanges and it isn't good. The NYSE is doing away with stop orders and CME destroyed real-time data with their MDP3 data fiasco.

William, there is no real-time data. The auto fills from the principal desk, are fast but not fairly distributed, the market making fills and book assignments, as well as the not held trades can be reported along the reporting delay regulations, and are optimised to pre-dispose the participants to stray towards order filling requirements, such as triggering conditional orders. Participants are like mushrooms, you keep 'em in the dark and you feed them bullshit (stefhardy: rules of acquisition: rule 174)

Donovan, if the end of stop limit orders creates more volume, what kind of volume is this ?

Well a stop loss with a price limit, triggers a limit order. A limit order is a free option derivative. Unlike a stop limit. For instance, a limit order to buy at $50, is a long PUT with a $50 strike. That's if you are a licensed member on that exchange. If so, you can sell a $50 put, and be covered on the compliance side. My point is that there is a value, the option premium, that is transferred to the market maker. Also, for the stability of financial markets, limit orders should not be covering short option positions.

Just think : what is the mathematical convolution that destabilises a system when a derivative is issued on a conditional purchase of a hard asset, when the hard asset is a principal determinant of the value the option.

So, how we gonna make money ?

Donovan, you said "the veil is thin". That got me thinking. Stop limits are not posted in the book as the market orders they are. So removing them, forces the small traders to show their hand. But also, the market maker has no hidden book, where a bunch of stop limit orders suddenly become market orders. Market makers regularly trigger these and fill their book accordingly. These were in effect hidden market orders, not shown. Market orders cause the largest price fluctuations, but also the largest fake movements, since these are mostly small orders. I think that maybe the market makers will loose a lot of money, and the market compliance officers will get a lot less complaints. Cheers.