I don't think I've seen SGX closed for trading longer than this time round, which lasted about 5.5 hours. It really didn't affected me much, but I can imagine the following groups of people being frustrated with the whole fiasco:
1. Those who naked short in the morning and wanting to close towards market end.
I wonder what will happen to these group of people. Technically it's not their fault to do a naked short since the market is closed so they can't buy back and close their positions even if they wanted to. I wonder how SGX will handle this case.
2. Those who are playing around with Noble rights.
It happened that 14th July is the last day of the nil paid trading rights period, so for those who wanted to sell their nil paid rights without subscribing or wanting to get more nil paid rights, they are prevented from doing so after 1130am. This is resolved when it was announced that the Noble nil paid rights trading period is extended for one more day until Fri. That much was certain and it's easy to solve.
3. Those who are playing around with companies going XD on Fri
That means that Thurs was the last day with the CD status. And since nobody can trade after 1130am, those buyers who wanted to buy to be entitled the upcoming dividends will miss the chance. Or those who want to sell their shares before XD won't be able to do so.
4. Those playing with HSI put/call warrants
HSI market is very much open while STI is closed for the day. This will result in arbitrage situations that may result in gain/loss for people. It's unfair, but I don't think SGX can do anything about it.
I'll be the first to admit that the above 4 groups of people are in the minority. These are generally complex stuff that most people won't even touch at all. If one brokerage firm screws up, we can 'insure' ourselves by having another brokerage platform to trade on. If SGX breaks down, what can we do?
Nothing. Sometimes shit happens and we just have to roll with the punches.
Or, we can really be careful with all the open trading positions we have and limit our exposure. I'm not talking about cut loss or stop losses here. It's just the number of open positions we have. If, for example, Dow jones dropped 10% after we had to stop trading on Thurs, I think the price might open much lower than your stop losses as the price gapped down, which means you will stop your losses lower than what your stop loss limit are. That can be disastrous.
Don't say such things won't happen. I think it'll happen more often when the market is unstable, like in a huge downturn and the volume surged so much that the server can't handle it.
9 comments :
especially for outsized positions.
"Or, we can really be careful with all the open trading positions we have and limit our exposure. I'm not talking about cut loss or stop losses here. It's just the number of open positions we have. If, for example, Dow jones dropped 10% after we had to stop trading on Thurs, I think the price might open much lower than your stop losses as the price gapped down, which means you will stop your losses lower than what your stop loss limit are. That can be disastrous."
LP,
One small typo - it's 11:30 am; not 11:30 pm.
The Simsci futures just went up up and away during the trading disruptions for stocks.
I think things are getting more and more complex nowadays...
I always have a funny thought - what if our banking and CPF records crashed and burned in a server crash or fire?
What if we got cyber-attacked?
OK, that's not funny anymore :(
Hi SMK,
Yes, if you have up to your nose level of open positions, I imagine you'll be extremely extremely anxious. Sell to sleeping point, so they say.
Was watching a video on the black Monday 19 Oct crash of 1987! Biggest single day % crash of Dow in history of 508pts and 22% loss! Some real recount of people who were then as traders and brokers there.
At that time computer trading just started but you still need manual trade bcos not many are linked to computer / system trade yet.
It was a big mess as orders were thick stacks of papers and everyone was just dazed! Many were left crying as they were wiped out in one day!
Imagine the sophisticated computer trading of today is sabotaged and all digital money were wrongly recorded!
Hi SMOL,
Thanks for the error spotting, already corrected :)
Wah, if our banks and CPF records are erased, I can bet that there'll be a riot of a scale we've not seen before. Not just money is at stake here, people's lives are in danger! Let's hope for everyone's sake that won't be happening.
Hi Rolf,
I had experienced something similar. I was trading warrants, then before I can close off my position, then platform crashed. I tried to log in multiple times, but it didn't work and my account got frozen. I called the broker but it's hard to get through because everyone also faced the same issues.
Eventually I was out but it was such an emotionally draining experience.
I swore to have a broker I knew by name and have a working relationship with him (no faceless brokers). I also have multiple trading platform and I don't oversize my positions and I don't trade warrants anymore.
Everyone will learn about such lessons in their own way, hopefully from the mistakes of others!
If Black monday of 1987 is to happen in today's times, the effect will be multiplied several fold. I don't wish to see it happen :/
can only hope the mistake is to credit several more zeros to the right of your bank account than clear it.
There is a show on bank records being wiped, including the backups. Its called "Mr Robot". http://www.imdb.com/title/tt4158110/
Hi grey,
Haha, looks good :) But don't want to be addicted to another series again lol
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