Please fasten your seat belt!
Traders are preparing for the chaos of election day. With the US election causing market turmoil, many trading platforms have warned users that they may face trading interruptions on Tuesday.
eToro warns that extreme conditions may trigger mechanisms.Circuit breakerOne of the largest applications in Europe, Trading 212, reminds users that some trading venues may implement temporary trading halts to stabilize the market.intraday tradingThe London-based trading platform Freetrade also plans to send warnings to users about expected volatility.
The London-based trading platform Freetrade also plans to send warnings to users about expected volatility.
Some companies warn that due to some states' votes not being counted until late Tuesday night in New York, volatility is likely to seep into overnight trading and persist throughout the entire trading day on Wednesday.
Next, both the Federal Reserve and the Bank of England are preparing to announce interest rates on Thursday, and the market needs to prepare for another surprise (or shock).
Freetrade spokesperson Alexander Campbell said: "Investors should be mentally prepared for the expectation of significant volatility in the market, and executing trades may also encounter difficulties. For retail investors caught up in geopolitical and economic turmoil, sticking to their investment strategy is crucial."
However, according to two individuals working in trading companies, these warnings are usually standard advisory notices issued by brokerages anticipating volatility. They mentioned that market-making firms have not yet seen severe trading interruptions, but they requested not to disclose their identities when discussing this information publicly.
Charles Schwab Corp. and Interactive Brokers Group Inc. both stated that they have not issued any warning messages.
An interactive brokers spokesperson based in Greenwich, Connecticut, said: "We do not expect any issues to arise at the moment. We see a high volume of trades on the exchange, with over 50 million contracts related to today's presidential election."
The rise of commission-free trading apps has empowered a new class of day traders to become significant players in global markets. For example, in the thriving field of zero-day stock options, retail investors account for over a quarter of the trading volume.