What happens if they decide to shut down the markets?

P

pinetboltz

so according to news from various sources, the Philippines has now decided to close their country's financial markets to all trading in stocks and bonds

their markets were down by 30%+ for the year

just wondering what happens if the policy gets implemented elsewhere, like if there's no trading to be allowed at all on ES, NQ, Nikkei, etc?

especially if the markets are suspended "indefinitely" with not much prior announcement

even if they open afterwards, the markets could be locked limit down multiple sessions, something that apparently happened to the old pros in those market wizards books as they described it

never say never, as apparently the situation is much more fluid than anyone thought it was going to be just a few weeks ago

even RenTech is down a lot for the year according to Financial Times

if they stop trading, does it mean everyone who is holding onto any position in futures or underlying stocks/bonds in effect get their assets frozen indefinitely?

personally i'm now closing all futures trades by 5pm ET everyday especially ahead of weekends, but am wondering if there are additional ideas for protecting cash, such as in case the brokers suspend withdrawals, etc

also hope they don't decide to announce 'suspension of trading' (not limit down/ limit up but totally close markets indefinitely) in the middle of the trading day or something like that
 
A suspension of trading or even only chatter about it is obviously poison to the market.
Risk could not be manage anymore.

But i would not rule out anything at the moment. Mr T in the WH seems to be on a Random walk himself, judging from his response to Corona the past weeks....
 
Now, the same state governors who critisized Mr T for trying to block the spread by travel bans months ago are on a random walk themselves. they issue new decree every couple hours in my area (I am in between WA and OR): no more than 500 ppl, oh, no more than 250 ppl, no-no-no - no more than 50 ppl, 10 ppl, etc. We are not closing schools, oh, let's close everything. What a statesmanship! One needs no nukes, just the toilet paper...
 
pinetboltz said:
so according to news from various sources, the Philippines has now decided to close their country's financial markets to all trading in stocks and bonds

their markets were down by 30%+ for the year

just wondering what happens if the policy gets implemented elsewhere, like if there's no trading to be allowed at all on ES, NQ, Nikkei, etc?

especially if the markets are suspended "indefinitely" with not much prior announcement

even if they open afterwards, the markets could be locked limit down multiple sessions, something that apparently happened to the old pros in those market wizards books as they described it

never say never, as apparently the situation is much more fluid than anyone thought it was going to be just a few weeks ago

even RenTech is down a lot for the year according to Financial Times

if they stop trading, does it mean everyone who is holding onto any position in futures or underlying stocks/bonds in effect get their assets frozen indefinitely?

personally i'm now closing all futures trades by 5pm ET everyday especially ahead of weekends, but am wondering if there are additional ideas for protecting cash, such as in case the brokers suspend withdrawals, etc

also hope they don't decide to announce 'suspension of trading' (not limit down/ limit up but totally close markets indefinitely) in the middle of the trading day or something like that
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They shouldn't do that stupid idea. It would create more havoc for sure. At this moment futures are in halt....going up, once again, squizo markets!
 
pstrusi said:
They shouldn't do that stupid idea. It would create more havoc for sure. At this moment futures are in halt....going up, once again, squizo markets!
More...

that's the dilemma -- the high vol makes it attractive to trade

but the risks are:
1) broker platforms freezing bc of unprecedented volumes, everyone logging in to trade from home and at the same time the brokerage employees, their IT staff also working from home
2) if the vol gets above a certain limit maybe they just shut the markets altogether

and it would probably be with little prior notice - so anyone holding onto an open position, even gains, would be frozen

on the other hand:

the US markets are much bigger than the Philippines & pretty much the whole world has exposure to US markets. like even the Norway pension fund made $200 bln in profits last year from being long the US stock market, so if the US markets stop trading, it would have much bigger repercussions and cause a whole lot of pushback, from shops like the large mutual funds, hedge funds, ETFs etc not to mention international funds as well
 
gaussian said:
They open 50% down next time they start it again.

Markets don't need a shutdown. If no one will take the other side of the trade the market shuts down anyway, effectively.

You should take this time to read reminiscences of a stock operator.
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That book is a golden classic. I don't care what anybody says.

But I'm curious what you mean by "if no one takes the other side of the trade."

Is that even possibly in our current time? I mean yea maybe even just 15 years ago that was possible, but now? Not too sure.
 
pinetboltz said:
that's the dilemma -- the high vol makes it attractive to trade

but the risks are:
1) broker platforms freezing bc of unprecedented volumes, everyone logging in to trade from home and at the same time the brokerage employees, their IT staff also working from home
2) if the vol gets above a certain limit maybe they just shut the markets altogether

and it would probably be with little prior notice - so anyone holding onto an open position, even gains, would be frozen
More...

Which brokers froze? And was it a significant problem?

Crazy to think even in 2020 our technology still freezes and loads.

Loading will one day be an archaic technological concept.

Anyway, your comment about vol reaching a certain limit. This is false, vol is mathematically unbounded. But if you meant regulators shutting the market down BECAUSE of vol reaching an extravagant level, i'm not too sure. I mean $VIX just reached levels higher than 9/11 and 08/09 crises, and markets are open for business. Idk, these are wild times.
 
.sigma said:
Which brokers froze? And was it a significant problem?

Crazy to think even in 2020 our technology still freezes and loads.

Loading will one day be an archaic technological concept.

Anyway, your comment about vol reaching a certain limit. This is false, vol is mathematically unbounded. But if you meant regulators shutting the market down BECAUSE of vol reaching an extravagant level, i'm not too sure. I mean $VIX just reached levels higher than 9/11 and 08/09 crises, and markets are open for business. Idk, these are wild times.
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lol, i use IB's TWS and there were glitches where on the DOM the prices don't load fast enough in real time and lag in updating only every so often

yea, you'd think by this time in modern history we'd be past toilet paper shortages too
 
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