Let's say you were long an unhedged stock portfolio on 9/11/01 (as many of us were). After the US markets were shutdown, what would have been some ways to hedge? Were any markets open in the world? And if so, how would you even be able to buy or sell on them? P.S. I don't mean to minimize the tradgedy of that day. I had some friends who made it out "safely" and one who didn't.
The European markets were open. As examples of hedges : FCE futures(trading on the MONEP) and Trackers on Euronext. Actually, the news were not at first reporting the events as a terrorist attack, so, for a little while, you could have hedged at a high price (9/11 was an up day (in Europe) until the attacks). OHLC
In fact, when the first plane hit, the futures dumped about 12 points, but the first reports were that it was an unfortunate "accident" and the futures traded right back to where they were prior to the crash (somewhere around -5 spu's I believe). Then when the 2nd plane hit, everything dumped again until the markets closed. I remember it very well cuz I had the chance to short some OTC stocks after the first crash and didn't do it.
The markets never opened, but ECN trading was available. I believe the QQQs traded on island until at least 10am.
Let's not forget about the many innocent Americans who lost their lives that day -- sons, daughters, mothers and fathers. May we never have the opportunity in the future to profit from such a catastrophe. aphie
can you trade US stocks on foreign markets with an IB stock and options (used to be called stock and options level 2) account?? if so, do you just need to subscribe to foreign data? also, i've tried to modify instinet orders after 8pm with my IB account, but with no luck. i was under the impression that INCA never closed (or if it did it was only in the middle of the night for a short period of time)...
this is a good thread. anything can happen at any time. being traders as many of us are, we may have positions when these events occur. many people aren't aware of what you can do.
aphexcoil: Absolutely Amen to that! I do think it's my responsibility as a trader to know how to hedge risk and react to events. I'm not thinking in terms of profit but in terms of not letting my account and those of my mother and sister be subject to the whim of some madman any more than they have to be. But if I could lose it all and have September 11th never happen, I would do THAT trade in a heartbeat.