NYSE invokes rule 48 in face of expected volatility

Aug 10 (Reuters) - The New York Stock Exchange and NYSE Amex Cash Markets on Wednesday invoked a rule to smooth trading at the market open, as futures pointed to a sharp drop in the major indexes.

Rule 48 allows the exchange to suspend price indications that help determine the floor price at the open during regular sessions. Bypassing the requirement helps speed the beginning of trading.

Among the triggers for invoking the rule are "substantial activity in the futures market before the open," according to the exchange's website.

S&P 500 futures SPc1 lost 27.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 fell 250 points, and Nasdaq 100 futures NDc1 dropped 47.5 points. (Reporting by Caroline Valetkevitch)

Source: http://www.reuters.com/article/2011/08/ ... CS20110810