Effectiveness of Stop Limit in a Mini Flash Crash

Overnight said:
The Dow dropped 1000 points 2 years ago in a single day. 700 points in early Aug last year. Very quickly. You could have gotten out, because they were not locked-limit due to the percentage drops (which were mild in comparison to 12 years ago).
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1000 point drop, eh? That's nothing, a drop in the bucket. :D These days we're used to it. Remember, back in 2008, we were trading between 800 and 1500 range. So imagine a 70-100 point drop in one day? That was scary.

Just look at this video and you would know how panicky everyone was 12 years ago.

 
August of 2015, June of 2016 (Brexit), election night of 2016. Perhaps, the Vol-maggedon in early Feb 2018.

(If the concern over sudden flash crashes is eating you up, then buy a deep otm ES futures options put, preferably with some time till expiration...It will explode in value if the market does in fact cascade lower and vols explode).
 
schizo said:
1000 point drop, eh? That's nothing, a drop in the bucket. :D These days we're used to it. Remember, back in 2008, we were trading between 800 and 1500 range. So imagine a 70-100 point drop in one day? That was scary.

Just look at this video and you would know how panicky everyone was 12 years ago.

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Yes, I know this video, I have posted it a few times. This was a pre-emptive call to GTFO, and it was valid! Cramer was right back then. He's a clown, but a prescient clown.
 
Overnight said:
This was a pre-emptive call to GTFO, and it was valid!
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Are you effing kidding me? That "prescient" idiot was BULLISH all the way to the day (or very close to) when Bear Sterns went belly up. This was him whining to the Fed for a free bailout, which he ultimately got.
 
Laissez Faire said:
The initial level 1 circuit break trading halt occurs at 7 % for the equity indices using the cash closing price at 4:00 PM ET.

With the current closing price of the e-mini S&P 500 index - this means a 231 drop to the price 3320,50.

Looking at some data I have at hand - the real nasty down days happened in 08 and 2 others in 10 and 11. The largest maximum daily drawdown appears to be - 9,24 % the 15th of October 2008 - the day Lehman Brothers went bankrupt.

Looking at my charts though - I see no evidence of any trading halt and I was not trading myself at the time, so I can't say how it played out.
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And a drop like that is much more likely in a polar bear trend/bear market. Bear busted up strangely,in a bear market.................................................................................
 
I can tell you first hand that if you are short and the fed does an emergency rate cut your stop limit may not trigger. After that day I have only used SM and have never had a major slippage issue on a stop out.
 
Thank you all for this information. I’ve decided to only use stop markets from now on. It’s definitely not worth the risk of missing the limit order and being forced to wait till the market sorts itself out.
 
the bigger the gap in price, that less liquid the market is..meaning bids and ask are wide man.
ES futures is and NQ,,point is wide..in percentage terms it's less than 1% .or .001% change in stock prices

ES futures are just derivative 'stocks' stocks prices a very wide gap and illiquid. it's like 50 cents or 25 cent spread or more like $1.
the bid and ask for stocks can be as high as 10% or 5% in the real market. market makers only have a few shares on the bid or sell side in the float.

traders buy and sell with POINTS well investors buy and sell in PERCENTAGES.
 
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