Traders are preparing for chaos on election day. As the U.S. elections stir market turbulence, numerous trading platforms have warned users that they may face trading interruptions on Tuesday.
eToro warns that extreme conditions may trigger circuit breakers. One of Europe’s largest day trading apps, Trading 212, advised users that some trading venues may implement temporary trading halts to stabilize the market.
London-based trading platform Freetrade also plans to send warnings to users about expected volatility.
Some companies have warned that due to voting in some states not concluding until Tuesday evening in New York, volatility is likely to spill into overnight trading and continue throughout Wednesday's trading day.
Immediately following, both the Federal Reserve and the Bank of England are set to announce interest rates on Thursday, and the market must prepare for another surprise (or shock).
A spokesperson for Freetrade, Alexander Campbell, said: "Investors should be mentally prepared for significant fluctuations in the market, and executing trades may also encounter difficulties. It is crucial for retail investors caught in the geopolitical and economic whirlpool to stick to their investment strategies."
However, according to two people working at trading companies, such warnings are typically standard advisory notices issued by brokers in anticipation of volatility. They said that these market-making firms have not seen severe trading interruptions at the moment, but they requested not to be identified when publicly discussing this information.
Charles Schwab Corp. and Interactive Brokers Group Inc. both stated that they have not issued any warning messages.
A spokesperson for Interactive Brokers, based in Greenwich, Connecticut, said: "We do not anticipate any issues at this time. We are seeing large trading volumes on the exchanges, with today's contract trading volume related to the presidential election exceeding 50 million contracts."
The rise of commission-free trading apps has made a new class of day traders an important force in the global market. For example, in the booming zero-day stock options space, retail investors account for more than a quarter of trading volume.
Article reposted from: Jinshi Data