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Trading halted as U.S. stocks plummet

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Re: Trading halted as U.S. stocks plummet

#631

Post by Youden »

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.

The decision isn't made real-time by actual people like I think you're suggesting.

The rules are well-known and set in advance by the SEC and exchanges. In this case it's SEC Rule 80B and NYSE Rule 7.12.

You can read more about trading curbs here [0] and this one in particular here [1].

[0]: https://www.investopedia.com/terms/t/tradingcurb.asp

[1]: https://www.nyse.com/markets/nyse/trading-info

Re: Trading halted as U.S. stocks plummet

#632

Post by totalZero »

HideousKojima wrote: post #246
A4ET8a8uTh0 wrote: post #198

Earlier quoted context omitted.

Without going into too much detail, short answer is yes. Most people don't seem to know how far away current setup is from 'free market' touted in school. It is weird given that this information is not hidden. It is just not widely spread.

The stock exchange is privately owned, the owners/management of the NYSE and other exchanges chose to implement circuit breakers like this. The exchanges still have to operate within the bounds of regulations, but nothing is stopping Joe Blow (other than capital, expertise, navigating regulations, etc.) from setting up his own stock exchange that doesn't have any circuit breakers put in place to prevent flash crashes…

The SEC would indeed stop Joe Blow from setting up his exchange in a way that skirts regulations.

Re: Trading halted as U.S. stocks plummet

#633

Post by kortilla »

allovernow wrote: post #395
mumblemumble wrote: post #305

Earlier quoted context omitted.

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…

> They discourage the regular guys from screwing themselves. 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…

If you’re a little guy that truly believed that, you wouldn’t have waited until the panic to happen to sell then.

Re: Trading halted as U.S. stocks plummet

#634

Post by bob1029 »

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.

Purchasing options is usually terrible advice for anyone who hasn't been doing this for a long time. Options are very difficult to do right. Even if your intentions are sound relative to what is occurring in the market (e.g. volatility plays today), you can still get some aspect wrong and lose a bunch of money.

My strategy is to operate with a margin account and use high/low water marks as the trigger points for adjusting leverage. For example:

I prefer to maintain my margin utilization under 40% of my overall portfolio balance. I also prefer to maintain a value/growth allocation such that my margin is usually self-funded via dividends, but I don't mind eating a little bit of fee for the long-term opportunity.

If my margin utilization falls below 40%, I will use the leverage until its right back at 40% (mandatory minimum).

If my margin utilization is at or higher than 45%, I will stop use of additional leverage (mandatory maximum).

The sweet spot for me is 40-45%. This is effectively my "options" range for market downturn. Within this range, I have granted myself authority to purchase equities based on daily market conditions. The window is narrow, but this morning I purchased a bunch of equities on margin right up until the 45% mark was hit. I obviously went for the ones in scope that were hit the hardest today.

Tomorrow, I will re-run that ruleset and act accordingly. The advantages of using margin to acquire shares is that you have the actual shares and can hold them long term. Contracts mean you get to pay taxes right away and have nothing to show for it after everything clears.

Re: Trading halted as U.S. stocks plummet

#635

Post by claudeganon »

malandrew wrote: post #521
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...

I'm wondering if what 2% dies matters. This disease is mostly going to kill people past their prime working years. There are going to be tons of sociological changes. Just speculating here: - Social security could have it's date of insolvency extended. It's currently predicted to be insolvent by 2037. Most pension programs in the world will be relieved of pressure if many of those over 60 years of age die. Many state…

Yes, the people who think that universal healthcare might be necessary to beat back this pandemic, as compared to the patchwork cruelty and parasitism of the current American system, are the ones who are naive.

The problem with rugged Capitalism in healthcare is eventually you run out of other people’s immune systems.

Re: Trading halted as U.S. stocks plummet

#636

Post by throwaway_tech »

arcticbull wrote: post #496
throwaway_tech wrote: post #493

Earlier quoted context omitted.

Why use S.Korea's numbers? Haven't they lead the best response in terms of testing and don't they have universal healthcare? It seems to me fatality rates would likely be higher in countries that: 1) aren't testing so aggressively and 2) don't have universal access to care. Maybe I am wrong though and there is good reason to believe S.Korea is the best example right now to use as a statistics model to apply across th…

Part of the reason their numbers are so low is because they're testing, which is revealing the stacks upon stacks of asymptomatic cases or cases which lead to the sniffles. That's why we know the actual mortality rates are so much lower than the media is screaming breathlessly about. Think about it: not a single story about the myriad people who've recovered completely, right? There've been 114,000 documented cases s…

>Part of the reason their numbers are so low is because they're testing, which is revealing the stacks upon stacks of asymptomatic cases or cases which lead to the sniffles.

I don't disagree, but my point is S.Korea is not just testing they are treating...if they were not treating presumably the mortality rates would increase. In other words whereas you suggest testing is proving the mortality rate is low, who many of those who tested positive received treatment? and further, got better because of treatment?

Testing is the key to treatment and minimizing mortality rates, other countries are failing on the testing, so it can be presumed they are also failing to treat (how can you treat when people aren't being tested).

Re: Trading halted as U.S. stocks plummet

#637

Post by kortilla »

csomar wrote: post #622

Despite all the blood, I see a bull case for Tech and the USA. In the last 5 years: 1- The Nasdaq has gained 99.77% until it's peak. It has corrected by 17.41% since the peak. Total gains till today: 64.9%. 2- The Dow Jones has gained 65% till the peak. Corrected by 21.71% since then. Total gains till today: 35.85%. 3- CAC 40 has gained 20% in the last 5 years till the peak. Corrected by 22.12% in this sell-off. Tota…

Tech doesn’t look too rosy if there is a problem with the entire hardware supply pipeline in China.

Re: Trading halted as U.S. stocks plummet

#638

Post by yskchu »

thefringthing wrote: post #623
csomar wrote: post #622

Despite all the blood, I see a bull case for Tech and the USA. In the last 5 years: 1- The Nasdaq has gained 99.77% until it's peak. It has corrected by 17.41% since the peak. Total gains till today: 64.9%. 2- The Dow Jones has gained 65% till the peak. Corrected by 21.71% since then. Total gains till today: 35.85%. 3- CAC 40 has gained 20% in the last 5 years till the peak. Corrected by 22.12% in this sell-off. Tota…

The practice of referring to increases in the price of an instrument as "gains" but any decline as a "correction" is bizarre.

> The practice of referring to increases in the price of an instrument as "gains" but any decline as a "correction" is bizarre.

Its not any decline - it needs to be 10% or more:

https://www.investopedia.com/terms/c/correction.asp

Re: Trading halted as U.S. stocks plummet

#639

Post by arcticbull »

throwaway_tech wrote: post #636
arcticbull wrote: post #496

Earlier quoted context omitted.

Part of the reason their numbers are so low is because they're testing, which is revealing the stacks upon stacks of asymptomatic cases or cases which lead to the sniffles. That's why we know the actual mortality rates are so much lower than the media is screaming breathlessly about. Think about it: not a single story about the myriad people who've recovered completely, right? There've been 114,000 documented cases s…

>Part of the reason their numbers are so low is because they're testing, which is revealing the stacks upon stacks of asymptomatic cases or cases which lead to the sniffles. I don't disagree, but my point is S.Korea is not just testing they are treating...if they were not treating presumably the mortality rates would increase. In other words whereas you suggest testing is proving the mortality rate is low, who many o…

> I don't disagree, but my point is S.Korea is not just testing they are treating...

There aren't really any treatments broadly available. They're holing people up in hospital beds and providing supportive care if needed. There's a few antiviral treatments in the pipeline.

Re: Trading halted as U.S. stocks plummet

#640

Post by nostrademons »

kelnos wrote: post #620
nostrademons wrote: post #478

Earlier quoted context omitted.

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…

> 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. It feels morbid talking about this, but: It depends on how the assets are passed. If most of them are in IRAs, then they'll get passed to heirs as inherited IRAs, and the new SECURE Act in the US will require the heirs to distribute the contents of those IRAs over the next 10 years, whic…

Unless consumer spending goes up significantly (also possible, and also good for the economy), the actual funds will likely get rolled into other investments after paying taxes, though. That's what I did after inheriting my dad's IRA: I didn't need the money, so it came out as an RMD and then went straight back into a different investment account.

I guess it could also go toward the down payment of a house, inflating the housing market even more. If lots of old people die the stock of houses on the market should go way up though, somewhat blunting the impact of this.

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