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If there were no buys to prop up the free falling, why did the markets rebound almost instantly?
by cynicalkane 17y ago
If there were no buys to prop up the free falling, why did the markets rebound almost instantly?
- startuprules 17y agogovernment intervention via JPM trading desks and trades cancellation from the exchanges
- nostrademons 17y agoDo you have any evidence whatsoever for that? Or is it just a case of "when something I can't explain happens, it's because the government did it"?
- blantonl 17y agoBecause liquidity returned to the market. The problem was the NYSE paused trading for many of the stocks in question for 90 secs because of heavy sell pressure, driving those trades to other markets which had little to no liquidity for a few minutes (and are solely electronic). Compound that with a possible trading error, and HFT algorithms, and you had a short period of time where there were no bids for those stocks on those electronic markets. When liquidity for those stocks returned to the market, the proper forces brought the stocks back to their bid/ask prices in a liquid market.