stock exchange question

Canadian Commodities Investing Discussion
sunshine
Posts: 23
Joined: Tue Jun 03, 2008 5:55 pm

stock exchange question

Postby sunshine » Fri Jun 06, 2008 8:28 pm

I was wondering if someone knows when and if the stock exchange automatically closes if the index (DOW, TSX) drops more than 10%?

theway
Posts: 26
Joined: Tue Jun 03, 2008 6:33 pm

Re: stock exchange question

Postby theway » Mon Jun 09, 2008 3:40 pm

I'm sure that there are limits for both Dow Jones and TSX, which will trigger trading halt if certain percentage drop has been reached. I remember back in January the Bombay Stock Exchange in India has suspended trading after a drop of close to 10%.

sunshine
Posts: 23
Joined: Tue Jun 03, 2008 5:55 pm

Re: stock exchange question

Postby sunshine » Mon Jun 09, 2008 6:22 pm

I guess they do that to prevent panic and market crash?

rock
Posts: 20
Joined: Tue Jun 10, 2008 3:06 pm

Re: stock exchange question

Postby rock » Tue Jun 10, 2008 3:47 pm

sunshine wrote:I guess they do that to prevent panic and market crash?


Yes, this is done to prevent self-feeding panic sell off. I don't think that it prevents market crash though, because if the things get so bad that they need to halt trading, the market crash already happened :).


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