> How much was lost by being unable to sell something today that you weren’t willing to sell yesterday?
Could be a lot. Markets are not disconnected. If only Japan existed, sure. Some orders would no longer exist, but nothing major, because noone else would be trading anyway.
But suppose this was during an economic downturn. You are trying to SELL SELL SELL because all countries worldwide are feeling some economic pressure and you can't because the exchange is down.
The next day, whatever assets you had are now worth a fraction of what they were one day before.
Oh, and there are some financial instruments that expire.
> You are trying to SELL SELL SELL because all countries worldwide are feeling some economic pressure and you can't because the exchange is down.
Some exchanges deliberately close in those circumstances. Or when big news is about to be released.
But as much as people were unable to sell, there are nearly as many situations where being unable to sell is a good thing.
I guess we’re eventually going to argue for 24/7 stock exchanges and for some reason very few are.
My own experience in Canada is that a lot of big Canadian stocks also trade in NY, and when one market is closed and the other isn’t because of different holidays, not a lot happens.
I guess an unexpected crash is different, but my guess is that everyone takes the day off, avoids releasing any big news out of respect for the situation and gets back to it tomorrow.
No need to pull 24/7 uptime into the conversation, I would say. The impact is that the exchange was not open when they were expected to be open. An outage like that is more disruptive than scheduled "downtime" because of being unplanned.
Except for FX, there is no need for 24/7 and plenty of drawbacks; both in terms of overhaed and execution quality.
In fact the trend is in the opposite direction, towards shorter trading hours as well as more turnover in the opening and closing auctions.
Shorter hours especially would be a huge win for work-life balance and diversity in the industry, and just as importly for reducing costs.
Having the markets open longer only spreads liquidity thinner across the day, and moreover having announcements made, corporate actions processed, etc etc is better done when the market is closed so everyone can be on the same page when the happen.
Could be a lot. Markets are not disconnected. If only Japan existed, sure. Some orders would no longer exist, but nothing major, because noone else would be trading anyway.
But suppose this was during an economic downturn. You are trying to SELL SELL SELL because all countries worldwide are feeling some economic pressure and you can't because the exchange is down.
The next day, whatever assets you had are now worth a fraction of what they were one day before.
Oh, and there are some financial instruments that expire.