from Hacker News

Trading in Stocks, ETFs Was Halted More Than 1,200 Times Early Monday

by brbcoding on 8/25/15, 3:47 AM with 50 comments

  • by bluedevil2k on 8/25/15, 10:38 AM

    Look at the ETF RSP yesterday. It's pretty much an S&P 500 index fund. When the S&P was down about 5% in the morning, RSP was down up to 40%. Didn't make any sense. Trading was getting halted every few minutes and buy orders were going unfilled.

    http://finance.yahoo.com/echarts?s=RSP+Interactive#{%22range...

  • by jvm on 8/25/15, 4:21 PM

    Throughout this thread, commenters are assuming that circuit breakers are helpful and useful. Yet no evidence in favor of that assumption is presented in the WSJ article. The CNN article quotes someone named "Dennis Dick" claiming they are useful without providing evidence.

    Under economic theory, interference in markets prevents them from correcting prices and is therefore never a good thing. Certainly Milton Friedman [1] thought they were harmful rather than helpful.

    Is anybody interested in sharing positive evidence that they are helpful? Helpful is presumably defined to mean they help prices stay as accurate as possible.

    [1] https://books.google.com/books?id=5NQvv_Z-zKcC&pg=PA151&lpg=...

  • by hartator on 8/25/15, 9:21 AM

  • by a3n on 8/25/15, 8:56 AM

  • by kaneplusplus on 8/25/15, 8:29 PM

  • by randomname2 on 8/25/15, 9:21 AM

    Yesterday was similar to the flash crash of 2010, except this time liquidity was much worse throughout the entire day, with a paralyzed market which was the direct result of countless distributed, isolated mini flash events, all of which precipitated the market's failure for the first 30 minutes of trading, illustrated by these stunning charts from Nanex: https://twitter.com/nanexllc

    Of note in the WSJ article is the passage noting the extreme discrepancy in EFT prices and fair value as hedge funds sold off ETFs and market makers such as high speed traders and Wall Street firms refused to step in.

  • by grecy on 8/25/15, 3:44 PM

    I find it amusing that when the market is rapidly going up, everything is left alone. But when it's rapidly going down, or sporadically doing so, they halt trading and turn everything off for a while.

    Does anyone else not see this as a clear sign the entire setup is broken and bogus? It's all a big joke.

  • by lucaspottersky on 8/25/15, 12:40 PM

    loved the paywall

  • by phelm on 8/25/15, 9:27 AM

    The need for these 'circuit breakers' really highlights the fact that Laissez-faire economic systems are in no way capable of keeping themselves stable.