Trading halted as U.S. stocks plummet • Hacker News Board

Re: Trading halted as U.S. stocks plummet

#191

Post by allovernow » Mon, Mar 09, 2020, 5:22 PM UTC

walrus01 wrote: post #188

Serious question, is anyone watching this carefully and trying to determine when things will bottom out (perhaps in a week or two), to buy stocks, ETFs, and such at the bottom of the dip? Hindsight is 20:20 of course, but there's a number of equities that one could have purchased shortly after the 2008 financial crisis that proceeded to make significant gains between 2009 and 2019.

No one will be able to time this. We don't even know if this is the start of a [global?] recession or depression.

If you haven't already, put your retirement into bonds and hold on. Honestly it might be a good idea to grab some cash from the bank to keep at home - bank runs are not outside the realm of possibility, although we have credit cards and other internet based payment methods now so it's probably less of a concern now.

Edit: let me just preface my advice by saying if you have extremely high risk tolerance, now is a good time to buy, but be prepared to lose. If you are near retirement, now is probably the time to pull all of your funds out of the markets and into something safer. Based on the 100 year history of the DJIA, and the fact that the virus is just starting to spread in the U.S., the floor could be much lower.

Re: Trading halted as U.S. stocks plummet

#192

Post by totally » Mon, Mar 09, 2020, 5:23 PM UTC

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Would they also circuit break on 7% increase, in order to give people time to come back from positive feelings?

Re: Trading halted as U.S. stocks plummet

#193

Post by [deleted] » Mon, Mar 09, 2020, 5:23 PM UTC

walrus01 wrote: post #188

Serious question, is anyone watching this carefully and trying to determine when things will bottom out (perhaps in a week or two), to buy stocks, ETFs, and such at the bottom of the dip? Hindsight is 20:20 of course, but there's a number of equities that one could have purchased shortly after the 2008 financial crisis that proceeded to make significant gains between 2009 and 2019.

[deleted]

Re: Trading halted as U.S. stocks plummet

#194

Post by raesene9 » Mon, Mar 09, 2020, 5:23 PM UTC

walrus01 wrote: post #188

Serious question, is anyone watching this carefully and trying to determine when things will bottom out (perhaps in a week or two), to buy stocks, ETFs, and such at the bottom of the dip? Hindsight is 20:20 of course, but there's a number of equities that one could have purchased shortly after the 2008 financial crisis that proceeded to make significant gains between 2009 and 2019.

I'm sure huge numbers of people are watching for exactly that opportunity, but if it was easy to reliably spot the tops and bottoms of markets, there'd be a lot more rich day-traders out there :)

Re: Trading halted as U.S. stocks plummet

#195

Post by draw_down » Mon, Mar 09, 2020, 5:23 PM UTC

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Everyone loves free markets until they don't.

Re: Trading halted as U.S. stocks plummet

#196

Post by isoskeles » Mon, Mar 09, 2020, 5:23 PM UTC

_se wrote: post #186

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

"They" don't do anything - this is called a circuit breaker, and is automatically triggered. There are three breakers: L1 - 7% down before 3:25pm - 15 minute halt L2 - 13% down before 3:25pm - 15 minute halt L3 - 20% down - halted for the remainder of the day Only a single L1 and a single L2 breaker can occur in a single day, e.g. the market falling below 7%, rising, then falling again will not trigger a second L1 br…

> Only a single L1 or L2 breaker can occur in a single day.

Then why does L2 exist? It seems redundant, L1 would get triggered before L2, and only one can occur in a single day, so why have L2 at all? What am I missing here?

Edit: Also, anyone who downvoted me for posting the same question as someone at the same minute, you know what to do.

Re: Trading halted as U.S. stocks plummet

#197

Post by _se » Mon, Mar 09, 2020, 5:23 PM UTC

darawk wrote: post #185

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

I believe it's true for the other direction as well, it's just pretty rare to see a 7% upward move in a single day. I mean, it's rare to see it on the downside too, but not as rare. Limit up/down rules are not discretionary. They're circuit breakers that fire deterministicly.

It's important to note that limit up/limit down (LULD) is not the same thing as the circuit breakers. They have a very specific meaning and operate independently (with much more complicated rules as well). You probably know this, but others reading your comment will probably not!

There is also no automatic upside circuit breaker.

Re: Trading halted as U.S. stocks plummet

#198

Post by A4ET8a8uTh0 » Mon, Mar 09, 2020, 5:23 PM UTC

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

Without going into too much detail, short answer is yes. Most people don't seem to know how far away current setup is from 'free market' touted in school.

It is weird given that this information is not hidden. It is just not widely spread.

Re: Trading halted as U.S. stocks plummet

#199

Post by jagged-chisel » Mon, Mar 09, 2020, 5:23 PM UTC

_se wrote: post #186

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

"They" don't do anything - this is called a circuit breaker, and is automatically triggered. There are three breakers: L1 - 7% down before 3:25pm - 15 minute halt L2 - 13% down before 3:25pm - 15 minute halt L3 - 20% down - halted for the remainder of the day Only a single L1 and a single L2 breaker can occur in a single day, e.g. the market falling below 7%, rising, then falling again will not trigger a second L1 br…

> Only a single L1 or L2 breaker can occur in a single day.

I don't follow. You'd hit 7% before 13%, so how would L2 ever execute?

Re: Trading halted as U.S. stocks plummet

#200

Post by eej71 » Mon, Mar 09, 2020, 5:24 PM UTC

bilekas wrote: post #180

Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ? > “There’s a reason why they have those circuit breakers -- it’s to give people time to come back from panicked feelings,” Seems strange that the market is kinda able to be manipulated like that. I'm not saying this is a bad move, just surprised that someone can do it.

These are well documented rules. They have been built up over years of experience. Not to say its perfect. But they are established and understood by the participants. Further refinements may happen based on today's experience.