391–400 of 1001 posts
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Would they also circuit break on 7% increase, in order to give people time to come back from positive feelings?
Looks like it's also on increases, yes: https://www.sec.gov/oiea/investor-alerts-bulletins/investor-...
The market-wide circuit breakers, which triggered this morning, only apply to declines.
In a world with zero-to-negative interest rates, unlimited margin available for the big players and a generation of boomers sold on the idea that stock appreciation (not dividends) is going to fund their retirement, what's the value of any company? Who knows? Until dividends are tax advantaged vs. capital gains, the insanity will continue. Leverage, huge risks and various shades of fraud, rather than responsible busi…
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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…
Sure, but I think it makes sense to say that one market is more free than another, even when neither is controlled by a government. In many cases the reasons why it's good for governments to allow free markets are also reasons why its good for private entities to allow free markets.
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I dont think its time to buy yet. If we have a multiple month disaster that requires quarantining most of the population the market will fall further.
Don't buy after the first big city is quarantined. Maybe after the second or third... But know you are taking an incredible risk unless you are using funds you can hold in that position for years.
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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.
Having worked for one of the (smaller) big firms, and had a chance to watch from the sidelines and seen how days like this work: No, these circuit breakers don't screw the regular guys. They discourage the regular guys from screwing themselves. There are a lot of firms whose core business strategy is to keep a level head and take advantage of people who panic and (over)react on days like this. They get damn rich doin…
If you're a little guy who believes that, say, 2019ncov is about to tear the world a new asshole, that's probably a decision you'd like to make for yourself.
I don't doubt what you're saying, but it's a matter of perspective. Sometimes the "panic" is the correct reaction. We're sitting on top of a perfect storm which is shaping up to be a massive potential black swan. And with the current circuit breakers, trading is only interrupted for something similar in concept to "the 99%".
Across all indicators, too! Oil price, US markets, international markets, t-notes, gold price, and a bunch I'm probably not aware of because I'm not a professional investor. China just shut it's economy down for two weeks. Long term outlook is rightfully poor.
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Do they have circuit breakers in the other direction?
No. This is just one of several places where the laws systematically favor the bulls.
Trading halts may or may not fix that, but that's their purpose.
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No. This is just one of several places where the laws systematically favor the bulls.
You are wrong about that. See T5, T6, and H10 halts.
T6: Halt - Extraordinary Market Activity Trading is halted when extraordinary market activity in the security is occurring; NASDAQ determines that such extraordinary market activity is likely to have a material effect on the market for that security; and 1) NASDAQ believes that such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting or execution system operated by or linked to NASDAQ; or 2) after consultation with either a national securities exchange trading the security on an unlisted trading privileges basis or a non-NASDAQ FINRA facility trading the security, NASDAQ believes such extraordinary market activity is caused by the misuse or malfunction of an electronic quotation, communication, reporting or execution system operated by or linked to such national securities exchange or non- NASDAQ FINRA facility.
H10: Halt - SEC Trading Suspension The Securities and Exchange Commission has suspended trading in this stock.
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They have existed since the crash of 1929. There were no algorithms in place then. The goal was just to force human traders caught up in the moment to take a break and stop panicking. I assume they have been tweaked since 1929, but they started with the crash back then. Edit: someone else is claiming 1987 as the start. My memory says 1929. If this matters do your own research.
https://www.investopedia.com/terms/c/circuitbreaker.asp
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Would they also circuit break on 7% increase, in order to give people time to come back from positive feelings?
Looks like it's also on increases, yes: https://www.sec.gov/oiea/investor-alerts-bulletins/investor-...
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No, because if the market is up 50% because we humanity has discovered an immortality serum, nobody is panicking. There's no downside in great news (other than the possibility of a quick reversal thereafer...)
Piling in on the buy side because of a fear of missing out counts as panicking.