Stop Orders Are Outdated—and Now Eliminated

As of February 26, 2016, the New York Stock Exchange (NYSE) no longer accepts stop orders. For those unfamiliar, a stop order is a type of automatic sell order triggered when a stock price falls below a preset level. While this may sound like a smart way to limit losses, the reality is more complex—especially for retail investors.

The NYSE argues that stop orders can actually worsen market declines. When prices drop and a wave of stop orders triggers, it adds to the selling pressure, pushing prices down even further. This issue is compounded by the rise of algorithm-driven trading, where reactions to market movements can be lightning-fast and extreme. While some retail investors initially pushed back, the use of stop orders has been declining for years. Their removal is just one more sign that today’s markets are very different from those of past generations.

A Costly Lesson in Short Selling

Retail investor Joe Campbell learned the hard way just how unpredictable markets can be. Believing KaloBios Pharmaceuticals was headed for bankruptcy, Joe shorted 8,400 shares of the stock—essentially betting the price would fall. Unfortunately for Joe, biotech executive Martin Shkreli bought a controlling stake in the company, sending the stock price soaring over 600% overnight.

Because Joe had sold shares he didn’t own, he was forced to buy them back at the inflated price, resulting in a staggering $100,000+ loss. He started with $37,000 and ended up owing over $106,000 to his brokerage. In a desperate move, Joe launched a GoFundMe page seeking help—only to remove it after facing widespread criticism. It’s a sobering reminder that aggressive strategies like short selling come with serious risk, especially in today’s fast-moving, headline-driven market.

Fiduciary Duty vs. Suitability: What’s the Difference?

The ongoing debate around the Department of Labor’s fiduciary rule highlights a key shift in financial advice. Matt Levine, in his Money Stuff column, summed it up well: fiduciary advisors must act in their client’s best interest and often charge transparent, upfront fees. Meanwhile, non-fiduciary advisors may appear cheaper but can receive hidden compensation—creating potential conflicts of interest.

Critics of the fiduciary rule argue that these clear fees might scare off some investors, pushing them away from advice altogether and into poor decision-making—like buying high, selling low, or avoiding investing entirely. As Levine put it: “Fiduciary advisers with disclosed transparent fees will look more expensive than old-style non-fiduciary advisers who were paid through secret kickbacks… This seems intuitively plausible to me. But also sort of gross, obviously.”

The broader message? Transparency and education are key. Investors deserve clear, honest advice—even if it looks more costly at first glance. In the long run, clarity and trust can pay off far more than “free” advice hiding hidden agendas.

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