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Trading halted as U.S. stocks plummet

axios.com

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Re: Trading halted as U.S. stocks plummet

#431

Post by throwsprtsdy »

airstrike wrote: post #400
throwsprtsdy wrote: post #381

Earlier quoted context omitted.

Piling in on the buy side because of a fear of missing out counts as panicking.

That's hardly symmetrical to the fear of losing the money that you have already invested – investors feel they have no choice but to sell before it gets worse, whereas in the rally you can always choose not to buy.

> That's hardly symmetrical to the fear of losing the money that you have already invested...

It's pretty symmetrical. Choosing not to buy is not as easy as it looks, when you are under pressure to do so. Madoff took advantage of this. The crash of 1929 was preceded by unhinged buying.

Re: Trading halted as U.S. stocks plummet

#432

Post by eli_gottlieb »

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…

Honestly, spring just happens to be the season when I contribute to my Roth IRA, so hey, I guess this year I get my index funds at a low per-share price. Thanks log-normal random walk!

Re: Trading halted as U.S. stocks plummet

#433

Post by bawana »

How valid is it to look to the past when there is so much cash floating around? With so much more demand for roi, I would think that in itself would bias the markets up. Almost like an invisible Keynesian injection eager to happen

Re: Trading halted as U.S. stocks plummet

#434

Post by jcfrei »

vortico wrote: post #29

Slightly unrelated, but why does the stock market close each night? If trading was open 24/7, we wouldn't have large spikes like this every morning. We'd only have them when certain news is announced.

Lots of good answers below. Additionally most of the trading happens in the opening and closing minutes. So you could trade almost the same volume even when the exchange only opened for 15 minutes per day (let's say once in the morning and evening).

Re: Trading halted as U.S. stocks plummet

#435

Post by kasey_junk »

apcragg wrote: post #356
kasey_junk wrote: post #328

Earlier quoted context omitted.

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.

The T5/T6 are not really directional circuit breakers though. They are momentum breakers that don’t bias towards downward momentum.

Re: Trading halted as U.S. stocks plummet

#436

Post by reb »

Frost1x wrote: post #402
1121redblackgo wrote: post #365

Earlier quoted context omitted.

I wonder if the inverse rings true as well. Bull markets are paved with the blood of pessimists.

So do the meager realists get to avoid bloodshed? Or, better yet, capitalize on the blood of pessimists and optimists?

Rarely! They're mainly collateral damage that gets hurt during the downturn AND the upswing.

Re: Trading halted as U.S. stocks plummet

#437

Post by bo1024 »

SubiculumCode wrote: post #406
Frost1x wrote: post #383

Earlier quoted context omitted.

To address OPs point, someone did do this. Someone (or more accurately, a lot of people) stepped in and introduced an artificial construct that constrains trading under certain conditions. It's not intrinsically a "bad" thing per se and it was something already established long before the current set of conditions arose. But none the less, it's an artificial constraint introduced on trade systems that is likely benef…

To those who believe that all markets are rational and efficient, that interventions cause more harm than good, y, an enforced halt seems to be anti-capitalist. But we are not rational actors. We can get into panics. Panics can stir more panic. Forced breaks allow for the market to reassess data for a few minutes without fear of loss for not acting immediately.

You would think, by the same arguments, that the stock market could always just trade at 15-minute intervals. Why not? But people go crazy when researchers (e.g. Eric Budish at U. Chicago) suggest lowering the frequency to milliseconds, let alone seconds or minutes.

Re: Trading halted as U.S. stocks plummet

#438

Post by asdfman123 »

throwsprtsdy wrote: post #408
rafiki6 wrote: post #316

Earlier quoted context omitted.

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

They exist to stop any participant, human or electronic, from going haywire.

"Let's all take a deep breath, y'all."

Re: Trading halted as U.S. stocks plummet

#440

Post by neural_thing »

OscarCunningham wrote: post #407
neural_thing wrote: post #339

Earlier quoted context omitted.

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

EDIT: This is wrong. There's no reason to ignore dividends. If you look at total return then it's above the high.

According to https://dqydj.com/nikkei-return-calculator-dividend-reinvest...

Nikkei is down 36% since January 1990 if you reinvest dividends. Do you have a source for your claim?

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