Are these large brokerages working in sync?
2007-02-27 08:46:55 · 4 answers · asked by ? 1 in Business & Finance ➔ Investing
DO YOU THINK IT WAS MORE INDIVIDUAL INVESTORS OR BROKERAGES?
IT HAPPENED AROUND FOUR O CLOCK EASTERN STANDARD TIME, DO YOU THINK MANY PEOPLE CAME HOME AND SOLD RIGHT AWAY ON THEIR COMPUTERS?
2007-02-27 09:12:07 · update #1
People were looking for a reason to sell as the market has been on a long bull run (since last July).
Greenspan spoke a while ago, so I wouldn't attribute that much to his words, though in concert with the other things, I could see his words having an impact.
Today was mainly due to the china sell off, along with the japanese and european sell offs.
Since we'd been in a decent bull run, several people were pretty well margined. Soo, starting the day with selling and continuing it with some downward pressure, the "other" things like greenspan and "overpriced" stocks came to mind. However, as the selling continued, I suspect it was margin calls and people then jumping onboard which really fueled the extended selloff.
Since people were levered, they then had to liquidate some positions in order to meet margin calls, which then helped continue the downward pressure.
And as for whom was selling, it was both institutions and others.
Many institutions trade off of "technical indicators". Many of these indicators triggered today as many stocks broke through support, triggering selling as well.
Hope that helps!
2007-02-27 10:21:46 · answer #1 · answered by Yada Yada Yada 7 · 1⤊ 0⤋
Most of the time, the market is pretty thinly traded, except in the S&P 100 and even there it is pretty thin. On a trillion share day, only about 1.5% of the total supply of shares is traded. It is likely that a series of margin calls occured to large institutional customers and they all had to raise cash quickly by the end of the trading day. The Chinese market crashed today and is reasonable to believe very large and illiquid investors suddenly needed cash at any cost.
Of course that is just a guess, but it is a reasonable guess. Prices drop when quantity offered increases until quantity demanded equals quantity supplied. This takes alot of cash and at most times the market doesn't have that much, particularly if the creditors are calling in the debts rather than offering to extend more debts.
2007-02-27 16:55:05 · answer #2 · answered by OPM 7 · 1⤊ 0⤋
There were more sellers than buyers.
2007-02-27 16:55:13 · answer #3 · answered by joe s 6 · 0⤊ 1⤋
what the hell are you talking about
2007-02-27 16:50:12 · answer #4 · answered by Anonymous · 0⤊ 4⤋