4 ms·
I have an issue with the description of such a fast and swift decline in stock prices as pointing out "that there is a structural flaw" or that this was somethi
by brown9-2 17y ago
I have an issue with the description of such a fast and swift decline in stock prices as pointing out "that there is a structural flaw" or that this was something that was devestating.
The article closes with:
Around 3 p.m., the selling pressure abated. Just as swiftly as the market fell, it recovered ground. One factor behind the swift recovery, traders say, were funds that use computers and formulas to sniff out bargains in the market. These funds swooped in on hundreds of cheap stocks, helping push the market higher.
So at the end of the day, the market (investors, algorithms, traders, etc.) saw bargains in under-priced assets and took advantage, making prices rise back to something near the original level (but a few percentage points off).
In the end, the market still worked.
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- steveplace 17y agoSort of. If you were cognizant enough to "sniff out bargains," and you placed an order to buy, odds are you didn't get filled. In fact, I call BS on anyone that said they "bought on the dip" because it happened so quickly even if you put a market order in on your Etrade platform (nearly all retail brokerages locked up BTW) you wouldn't get the price you wanted. The structural flaw existed on both sides of the market. Everyone's focusing on the lack of bids on the way down, but there were lack of offers on the way up as well. I would've expected more volume on a capitulative move like that.
- brown9-2 17y agoWell I think if the rise was too fast too take advantage of, the opposite must be true of the way down, no? I remain very doubtful that very many people were hurt by this action in the market.
- yummyfajitas 17y agoMany retail investors stupidly placed stop loss orders which hurt them on the way down. Very few people placed "don't miss out on a gain" order.
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