4 ms·

I thought these circuit breakers actually existed to stop algo's from going haywire?

bluGill 7y ago
They have existed since the crash of 1929. There were no algorithms in place then. The goal was just to force human traders caught up in the moment to take a break and stop panicking. I assume they have been tweaked since 1929, but they started with the crash back then. Edit: someone else is claiming 1987 as the start. My memory says 1929. If this matters do your own research.
- jcape 7y ago
  https://www.investopedia.com/terms/c/circuitbreaker.asp https://www.investopedia.com/terms/c/circuitbreaker.asp
  - bluGill 7y ago
    Well something was put into place after 1929...
  - jahlove 7y ago
    > Regulators put the first circuit breakers in place following the market crash of October 19th 1987, when the Dow Jones Industrial Average (DJIA) shed 508 points (22.6%) in a single day. The crash, which began in Hong Kong and soon affected markets worldwide, came to be known as Black Monday.
- jahlove 7y ago
  > In 1933, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities. https://en.wikipedia.org/wiki/1933_Banking_Act https://en.wikipedia.org/wiki/1933_Banking_Act
  - forkexec 7y ago
    It was repealed in 1999. https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the_Glass%E2%80%93Steagall_Act https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the...
phinnaeus 7y ago
Seems like that kind of thing would be implemented on the algorithm side, not the market.
- jaywalk 7y ago
  You'd hope so, but why not have protection on the other end as well?
- TallGuyShort 7y ago
  It probably doesn't make sense for an individual actor to stop trading when all the assets it holds are tanking. Everyone's selling to cut their short-term losses. Crashes aren't always feedback loops.
- AgentME 7y ago
  No one would self-impose the limit on themselves, because you could profit if you trade while everyone else isn't trading.
- azernik 7y ago
  You do not want to trust your market's health to some random trading firm's coding skills and goodwill, just like you wouldn't open up a public webservice without some basic rate-limiting.
throwsprtsdy 7y ago
They exist to stop any participant, human or electronic, from going haywire.
- asdfman123 7y ago
  "Let's all take a deep breath, y'all."

They have existed since the crash of 1929. There were no algorithms in place then. The goal was just to force human traders caught up in the moment to take a break and stop panicking. I assume they have been tweaked since 1929, but they started with the crash back then. Edit: someone else is claiming 1987 as the start. My memory says 1929. If this matters do your own research.

jcape 7y ago
https://www.investopedia.com/terms/c/circuitbreaker.asp https://www.investopedia.com/terms/c/circuitbreaker.asp
- bluGill 7y ago
  Well something was put into place after 1929...
- jahlove 7y ago
  > Regulators put the first circuit breakers in place following the market crash of October 19th 1987, when the Dow Jones Industrial Average (DJIA) shed 508 points (22.6%) in a single day. The crash, which began in Hong Kong and soon affected markets worldwide, came to be known as Black Monday.
jahlove 7y ago
> In 1933, the U.S. Congress passed the Glass–Steagall Act mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities. https://en.wikipedia.org/wiki/1933_Banking_Act https://en.wikipedia.org/wiki/1933_Banking_Act
- forkexec 7y ago
  It was repealed in 1999. https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the_Glass%E2%80%93Steagall_Act https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the...

phinnaeus 7y ago

Seems like that kind of thing would be implemented on the algorithm side, not the market.

jaywalk 7y ago
You'd hope so, but why not have protection on the other end as well?
TallGuyShort 7y ago
It probably doesn't make sense for an individual actor to stop trading when all the assets it holds are tanking. Everyone's selling to cut their short-term losses. Crashes aren't always feedback loops.
AgentME 7y ago
No one would self-impose the limit on themselves, because you could profit if you trade while everyone else isn't trading.
azernik 7y ago
You do not want to trust your market's health to some random trading firm's coding skills and goodwill, just like you wouldn't open up a public webservice without some basic rate-limiting.

throwsprtsdy 7y ago

They exist to stop any participant, human or electronic, from going haywire.

asdfman123 7y ago
"Let's all take a deep breath, y'all."