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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#471

Post by HolyLampshade »

rwmj wrote: post #444
HolyLampshade wrote: post #239

Earlier quoted context omitted.

Mass sell offs tend to create unorderly markets, which is not beneficial for anyone. The concept was introduced in US equities after the ‘87 crash, but was only consistently implemented for NYSE-listed stocks. In ‘13 these were made consistent and market wide (thus MWCB), set against a widely published value of the S&P (so that the control was predictable; thus how it executed today). FYI, there are also bidirectiona…

> Mass sell offs tend to create unorderly markets, which is not beneficial for anyone. It's beneficial for people who want to buy stocks cheaply or if we truly believe that markets are about price discovery.

> markets are about price discovery

Exactly, and when you have an unorderly market, price discovery becomes problematic.

It’s the same reason the single stock LULD bands exist (which put the brakes on both rapid downward and rapid upward movement). Stopping for 15 minutes (or 5 in the case of a LULD pause) is not detrimental to the process of establishing orderly price discovery.

In the event a stock is going to keep rising or falling due to legitimate changes in valuation it will continue to do so (look at NASDAQ’s halts page today to see stocks that have hit their bands multiple times).

Re: Trading halted as U.S. stocks plummet

#472

Post by hogFeast »

endorphone wrote: post #190
frgtpsswrdlame wrote: post #179

Currently only 6% down, perhaps (anecdotal) evidence that halts work?

Days with a large pre-market drops often follow this pattern. As the end of the day approaches the selling often becomes panicked again.

Yep, that is due to order flow from retail investors. They always put their orders in at the open (that is why Mondays can be risky) or at the close.

You can see this by looking at the difference between the return on stocks in the first/last hour against the return over the rest of the day. I have no idea if this effect still exists today but you used to be able to print money from this (and I am sure it still works in places like China with lots of retail investors).

Re: Trading halted as U.S. stocks plummet

#473

Post by aguyfromnb »

ronyfadel wrote: post #439

A lot of comments are saying that a recession is probable. Can anyone shed a light on why that is/could be the case?

A recession isn't probable, it's inevitable. It's just a matter of how much sludge builds up in the economy before the over-leveraged have to unwind. That's the business cycle.

Covid19 and the ensuing fall in global demand is simply another blob on the pile.

Re: Trading halted as U.S. stocks plummet

#474

Post by eternalban »

neural_thing wrote: post #339
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.

https://vimeo.com/110710752

Re: Trading halted as U.S. stocks plummet

#476

Post by philwelch »

arcticbull wrote: post #454
mensetmanusman wrote: post #390

Earlier quoted context omitted.

Yep, over half of GDP growth is tied to population growth. If 2% of humanity is about to die...

2% of humanity is absolutely, in no way, shape or form about to die. The Korean numbers are approaching 0.5% case fatality rate, and those numbers continue to fall. It's about the same as the flu, and no, the flu isn't killing 2% of humanity either. Y'all need to settle down and get back to work.

I fully expect South Korea to be an outlier in this respect.

Re: Trading halted as U.S. stocks plummet

#477

Post by eCa »

virgilp wrote: post #412
mensetmanusman wrote: post #390

Earlier quoted context omitted.

Yep, over half of GDP growth is tied to population growth. If 2% of humanity is about to die...

2% (maybe more actually) is the mortality rate of those infected. But so far infection rate was 0.001% ; it would need to be 3 full orders of magnitude worse to even approach an infection rate of 2%....

According to Wikipedia[0], which in turn sources material from January (mostly China), each infected person infected 2.2-3.9 others on average. So in three generations you go from 1 to 27. Three generations more, from 27 to 729 (if my math is correct).

[0] https://en.wikipedia.org/wiki/Basic_reproduction_number

Re: Trading halted as U.S. stocks plummet

#478

Post by nostrademons »

jmpman wrote: post #423
mensetmanusman wrote: post #390

Earlier quoted context omitted.

Yep, over half of GDP growth is tied to population growth. If 2% of humanity is about to die...

Are those 2% that are about to die the consumers which drive consumption? Maybe in healthcare, but suspect 70 and 80 year olds aren’t buying a lot of new cars.

If anything that'll prop up stock prices further. We were about to hit a demographic time bomb in the mid-2020s as the baby boomers started to retire and need to sell their 401(k)s to live on and afford medical treatment. If they all die suddenly, then their assets get passed on to their prime-working-age children, who have no need to cash them out. More savings finding their way into a dwindling supply of available stock = higher stock prices.

That's a few years off, though. During the crisis itself, when nobody knows whether they'll live or die or what sort of interventions they need stay alive, I expect to see massive panic selling.

Re: Trading halted as U.S. stocks plummet

#479

Post by pgwhalen »

ct0 wrote: post #38
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.

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

The market is still very much driven by humans; the computers just help out, to varying degrees. The idea that computers are trading unattended is a myth that I hope would die.

Re: Trading halted as U.S. stocks plummet

#480

Post by Natsu »

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?

The real money is in collecting some % of the money invested as fees.
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