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

Re: Trading halted as U.S. stocks plummet

#251

Post by [deleted] » Mon, Mar 09, 2020, 5:34 PM UTC

burlesona wrote: post #218

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.

In large part these are designed to break the feedback loops that can happen in automated high frequency trading and give humans a chance to look at things. These policies were implemented by all the stock exchanges after flash crashes triggered by ML algorithms encountering something "weird" and going into hard sell mode. https://en.wikipedia.org/wiki/Flash_crash

[deleted]

Re: Trading halted as U.S. stocks plummet

#252

Post by chungus_khan » Mon, Mar 09, 2020, 5:35 PM UTC

burlesona wrote: post #218

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.

In large part these are designed to break the feedback loops that can happen in automated high frequency trading and give humans a chance to look at things. These policies were implemented by all the stock exchanges after flash crashes triggered by ML algorithms encountering something "weird" and going into hard sell mode. https://en.wikipedia.org/wiki/Flash_crash

The breakers were originally implemented as a response to Black Monday in 87, which was before algorithms were so dominant, but it happens that humans are really good at panicking and acting irrationally too.

Re: Trading halted as U.S. stocks plummet

#253

Post by thedance » Mon, Mar 09, 2020, 5:35 PM UTC

sjg007 wrote: post #224

totaldude87 wrote: post #184

To be honest , the market was in dire need for correction, BUT wonder where we will be when companies starts reporting their quarterly results and impact of that. So far this looked more like a correction than a precursor to the recession. To make things worse, OPEC dropped bombs which spread the wildfire further..

Why was or is the market in need of a correction? What is your evidence for that statement?

The market has just been unhinged lately, because there are a lot of huge positions that would love to sell but just can't unwind. Consequently there has not been an effective downward pressure on asset prices, and a lot of garbage is overpriced.

I still don't expect a major correction here because there's so much underused capital flying around out there and it will pour into anything that looks even remotely like a bargain. We have entered a regime where the world's economies have more capital than they are willing to use, which is novel and weird. Expect markets to act in novel and weird ways.

One thing I can easily predict is American governments large and small will take the wrong actions. They will cut taxes and slash spending when the bond markets are begging them to spend more. States and cities should be out there right now selling as many bonds as they can.

Re: Trading halted as U.S. stocks plummet

#254

Post by lm28469 » Mon, Mar 09, 2020, 5:35 PM UTC

savanaly wrote: post #208

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.

It's specifically because there are huge numbers of people watching this carefully and trying to do that that it is irrational on the margin to try to do so.

This, it's not 1940 anymore, the average Joe can setup an investment account in 5 min on his phone and heard his buddies talking about "buying the dips is a foolproof way to become a millionaire".

Re: Trading halted as U.S. stocks plummet

#255

Post by danmaz74 » Mon, Mar 09, 2020, 5:35 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.

IIRC this was instituted after the crash of 1987, when they realised that automated trading could set off a crazy plunge. At any rate, it's public knowledge, not some sort of ad-hoc manipulation.

Re: Trading halted as U.S. stocks plummet

#256

Post by airstrike » Mon, Mar 09, 2020, 5:35 PM UTC

allovernow wrote: post #203

bilekas wrote: post #189

Earlier quoted context omitted.

Okay thats fine, but who implements/decides these circuit breakers ? And what purpose to they serve only to limit a mass sell off ? Nice point about only 2 daily. But still seems crazy.

AFAIK people can still trade in private, just not on the NYSE. So don't worry, it's only us regular guys that get screwed. Big firms can still contact each other to make deals.

> So don't worry, it's only us regular guys that get screwed. Big firms can still contact each other to make deals.

And when everyone is selling, who do you think is buying? No one is moving much of anything for those 15 minutes

Re: Trading halted as U.S. stocks plummet

#257

Post by HideousKojima » Mon, Mar 09, 2020, 5:35 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.

The most important rules to follow when investing in stocks:

The market can stay irrational for longer than you can stay solvent

and

Don't bet any more on the market than you're willing to lose

Re: Trading halted as U.S. stocks plummet

#258

Post by zyang » Mon, Mar 09, 2020, 5:36 PM UTC

allovernow wrote: post #191

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 c…

Please don't shuffle your retirement investments based on market volatility. Best thing is just do nothing and ride it out.

Re: Trading halted as U.S. stocks plummet

#259

Post by eej71 » Mon, Mar 09, 2020, 5:36 PM UTC

A4ET8a8uTh0 wrote: post #231

eej71 wrote: post #205

Earlier quoted context omitted.

These rules are completely in keeping with the free market.

Would you care to elaborate? I would argue that guard rails and controlled falls are in opposition to actual free market. The qualifier 'completely' seems misplaced.

These rules are chosen by the participants. By the owners of the property. They are not government imposed.

Consider an analogy. Suppose you were a stamp collector and you wanted to run a weekly stamp exchange. You and your fellow collectors may establish rules about how the trading should happen and the agreed upon behaviors. By-laws if you will. You could of course have no rules. Or you could choose some that promote the overall longevity of the venue and that encourage robust participation. The choice is up to the owners. Both are free. But one will be more successful than the other.

Re: Trading halted as U.S. stocks plummet

#260

Post by wycy » Mon, Mar 09, 2020, 5:36 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.

When you think about it, the whole market sort of follows these arbitrary-seeming rules. The actual prices of stocks are constantly changing 24/7/365, but the market is only open from 9:30am-4:00pm on weekdays excluding holidays.