OT MD11 crashes in Hong Kong

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I'm listing the link to this article about the airplane crash not because I believe the crash is in any way y2k-related but because of this small section of the article:

"In Taipei shares of China Airlines, Taiwan's top carrier, plunged in early morning trade, falling the daily seven percent volatility limit at T$21.3. Analysts said the crash would hurt the airline just as it was recovering from a 1998 crash in Taiwan."

Does anyone know if all/most stock markets have a "volatility limit?"

-- Rachel Gibson (rgibson@hotmail.com), August 22, 1999

Answers

"Analysts said the crash would hurt the airline just as it was recovering from a 1998 crash in Taiwan."

Not to mention what it might have done to the passengers. (Or does that count?)

-- Mara Wayne (MaraWAyne@aol.com), August 23, 1999.


Mara, Some of those passengers found themselves hanging upside-down by their seatbelts for three hours. They might refuse to fly again. That would hurt the bottom line, too.

-- Rachel Gibson (rgibson@hotmail.com), August 23, 1999.

Rachel,

US stock (equity) markets do not appear to have "volatility limits" on individual equities. The NYSE has some kinds of limits based on swings in some index, I think the DJIA.

US futures markets appear to have limits on swings in individual commodity contracts, but I do not know the details.

Jerry

-- Jerry B (skeptic76@erols.com), August 23, 1999.


Thanks, Jerry. So, in the event of a sudden, sharp downturn, the only likely way to impede it would be to shut-down trading altogether, yes?

-- Rachel Gibson (rgibson@hotmail.com), August 23, 1999.

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