Re:Chinese Markets Halted, Equities Plunge Another 7%
by fleitz on Thursday January 07, 2016 @07:14PM
(#10861918)
It makes it worse when they say they are propping up the market, if the market is at a relative peak and daddy warbucks shows up saying he'll buy anything no matter the cost, of course everyone is going to get out while the getting is good.
If you think you _may_ want to sell at all tomorrow but also think a circuit breaker could trigger, you're going to sell first thing in the morning. So will everyone else.
The circuit breaker can actually trigger a worse panic as investors all try to squeeze in sell orders at once. This triggers the circuit breaker, confirming everyone's fears, and starts again the next day.