A Change in The Program

Curbing a disputed stock play

Computer-launched program trading, blamed by many for the severity of the Oct. 19 market meltdown, has become even more controversial in the seven months since the crash. The most widely practiced form of program trading, index arbitrage, has been directly linked to at least two post-crash market plunges, despite new rules designed to limit its effects. All the while, critics have blamed a handful of cash-rich investment firms for turning the stock market into a gambling casino and scaring away small investors.

Last week Wall Street seemed to get the message. In rapid-fire announcements made on the eve of congressional hearings...

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