Both the FC day and 8/24 were low liquidity - peak volume days far and wide. So the "big guys" certainly weren't
absent since a herd of retail sheep neither creates volume nor liquidity. The point is when market participants
enter the DOM.
In that sense the only major difference between 8/24 and the FC were the circuit breakers. During the FC
the prices just plopped through an empty DOM without pause while market makers etc withdraw according
to the old catastrophic event rules. So many assets only found a bottom at the stub limits before any interest
On 8/24 the circuit breakers did what they were supposed to do and created pauses in which market makers,
specialists, and other participants refilled the bid/ask, i.e.: created liquidity. As soon as the DOM was back at the
officially required level, the trading continued up to the next circuit breaker. And so on down to the halt for several
minutes right before the RTH opening.
So 8/24 was "more liquid" under compulsion, but trading continued.
Did that prevent massive losses in many assets? Certainly not.
The following user says Thank You to choke35 for this post:
However my main question stemmed from if there are folks in here who have certain systems/capabilities in place to figure out across a large section of instruments when there is a Cross of NBBO or the Spreads do not make sense, etc etc which may help avoid certain situations. However maybe there are ways if one can monitor not only instruments but their correlations across Exchanges, also events of Bid/Ask and Price ... and well if not....its hard to understand these events is what i gather.
have always found food for thought & amazing insight of market structures and inner inter workings in Eric's papers @nanexllc since it gives retail atleast some thoughts to try and process what happens in markets