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

Re: Trading halted as U.S. stocks plummet

#331

Post by Hoasi » Mon, Mar 09, 2020, 5:50 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.

> Genuine question: They can just do that ? Issue a trading halt because they don't like the direction it's going ?

This is a dangerous game, in that it is indeed revealing the artificial, make-belief, nature of financial markets.

Re: Trading halted as U.S. stocks plummet

#332

Post by phinnaeus » Mon, Mar 09, 2020, 5:50 PM UTC

rafiki6 wrote: post #316

_se wrote: post #186

Earlier quoted context omitted.

"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…

I thought these circuit breakers actually existed to stop algo's from going haywire?

Seems like that kind of thing would be implemented on the algorithm side, not the market.

Re: Trading halted as U.S. stocks plummet

#333

Post by jedberg » Mon, Mar 09, 2020, 5:50 PM UTC

chrshawkes wrote: post #84

I don't know if it was a good bet but I moved all my 401k into money market accounts for the time being last Thursday. I feel like those who say I should ride the wave down are probably not telling me the truth. All indicators seem to suggest a 25% correction or more before the end of the year. I've been buying stocks heavily on the latest dips and so far that is all down around 20%. I diversified investments in crui…

You're not being told to ride the wave down per se, you're being told that you can't time the market so there is no point in trying.

You got lucky this time, but next time you might pull out just as it's about to swing up again.

Or when you eventually buy back in, it might not be the bottom. Or more likely, it will be after the bottom on the upswing and then you've lost out even more.

Re: Trading halted as U.S. stocks plummet

#334

Post by gringoDan » Mon, Mar 09, 2020, 5:50 PM UTC

sethgecko wrote: post #300

ct0 wrote: post #38

Earlier quoted context omitted.

The market was not always driven by computers like it is now, and people running it needed to sleep.

People running hospitals need to sleep too but they dont close for the night

People need medical care for emergencies in the middle of the night. People don't have the same need to trade 24/7.

Matt Levine and others argue that shorter trading hours would actually increase market liquidity. Synthesize market information outside of market hours, then trade during a shorter window: https://www.bloomberg.com/opinion/articles/2020-03-09/stuff-...

Re: Trading halted as U.S. stocks plummet

#335

Post by ones_and_zeros » Mon, Mar 09, 2020, 5:50 PM UTC

tempsy wrote: post #278

Buy S&P puts as a hedge to save your account in times of extreme volatility. I had 270 strike puts for April I bought on Friday for $6 that jumped to $15 today and got my account to break even even though the value of my stocks went down.

What is the end game with this strategy? If you sell the puts today to capture the profits, do you also sell your equities? If you don't sell your equities isn't there a chance the slide further? If you hold the puts to maturity why buy them at all?

Re: Trading halted as U.S. stocks plummet

#336

Post by darkwizard42 » Mon, Mar 09, 2020, 5:51 PM UTC

thedance wrote: post #253

sjg007 wrote: post #224

Earlier quoted context omitted.

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…

Huh, this was a ton of speculation in 3 paragraphs. Could you expand on what are the huge positions that are looking to sell? Are there any examples of overpriced equities?

I think your second paragraph makes sense given some large cap companies holding so much cash on hand due to inability to find anything useful to invest in (and stock buybacks)./

Re: Trading halted as U.S. stocks plummet

#337

Post by A4ET8a8uTh0 » Mon, Mar 09, 2020, 5:51 PM UTC

eej71 wrote: post #259

A4ET8a8uTh0 wrote: post #231

Earlier quoted context omitted.

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 promo…

Hmm, the problem with analogies is that they are analogies. I don't think NYSE or ICE has the same kind of impact on the market as a stamp collectoe. Hell, NYSE is almost literally the market. Thus any rules enforced by it are, for all practical purposes, market rules. They may agree with themselves that saving the market is the right thing to do, but guiding it does not make it free. It makes it not free.

Re: Trading halted as U.S. stocks plummet

#338

Post by astura » Mon, Mar 09, 2020, 5:51 PM UTC

danmaz74 wrote: post #277

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 was delaying investing in the stock market waiting for the next recession. My intention though isn't to try to time the bottom (which nobody can predict), but just to start buying when I think prices are "good enough".

Are they good enough now?

Re: Trading halted as U.S. stocks plummet

#339

Post by neural_thing » Mon, Mar 09, 2020, 5:51 PM UTC

cletus wrote: post #315

So, children of summer (there are many here who have only known the longest bull market in the last century), let me give you some free advice. If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. Some points to consider: - If your time horizon is 10+ years out probably none of this ma…

The Nikkei is still ~50% below its 1989 high. Hasn't even approached that level since. Downturns can go on for decades.

Re: Trading halted as U.S. stocks plummet

#340

Post by thedance » Mon, Mar 09, 2020, 5:51 PM UTC

zyang wrote: post #258

allovernow wrote: post #191

Earlier quoted context omitted.

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.

This advice is both common and crazy. Each individual does not live the average life. Being able to recognize once-in-a-lifetime events, and act on them, is a rational strategy, even if it seems like it is not the optimal strategy for the perfectly spherical portfolio belonging to a person with infinite lifetime.