How many people died? How many were hospitalized?
I was talking about monetary damages - excluding any kind of loss of life or personal injury.
I could have picked a better metaphor!
How much was lost by being unable to sell something today that you weren’t willing to sell yesterday?
So you have the opportunity costs for those people being paid to do nothing for a day and generating nothing in the form of revenue. Rightly or wrongly, a significant amount of profit generated in the stock market is from short term moves / games, not from buying and holding for long periods.
Second, and I don't know if this is the case, but what about companies that were issuing equities to raise cash on that day? They had geared up entire investment banking teams, with customers orders lined up, and had a whole game plan for executing the offerings.
That all went up in smoke and they will have to re-prepare everything for another day. That's true to IPOs, general follow-on offerings, to some extent ATM programs, etc.
Those are a couple ideas, maybe there are more?
Could be a lot. Markets are not disconnected. If only Japan existed, sure. Some orders would no longer exist, but nothing major, because noone else would be trading anyway.
But suppose this was during an economic downturn. You are trying to SELL SELL SELL because all countries worldwide are feeling some economic pressure and you can't because the exchange is down.
The next day, whatever assets you had are now worth a fraction of what they were one day before.
Oh, and there are some financial instruments that expire.
Some exchanges deliberately close in those circumstances. Or when big news is about to be released.
But as much as people were unable to sell, there are nearly as many situations where being unable to sell is a good thing.
I guess we’re eventually going to argue for 24/7 stock exchanges and for some reason very few are.
My own experience in Canada is that a lot of big Canadian stocks also trade in NY, and when one market is closed and the other isn’t because of different holidays, not a lot happens.
I guess an unexpected crash is different, but my guess is that everyone takes the day off, avoids releasing any big news out of respect for the situation and gets back to it tomorrow.
In fact the trend is in the opposite direction, towards shorter trading hours as well as more turnover in the opening and closing auctions. Shorter hours especially would be a huge win for work-life balance and diversity in the industry, and just as importly for reducing costs.
Having the markets open longer only spreads liquidity thinner across the day, and moreover having announcements made, corporate actions processed, etc etc is better done when the market is closed so everyone can be on the same page when the happen.
They just lost at least a whole day of revenue.
After compiling some number for their annual report[1], I would say the loss from TSE revenue alone is roughly 2 million USD. But considering the effect trickling down the revenue stream where other security partners whose revenue depends on earning transaction fees, I would say the real damage would be many folds of that 2 million loss from TSE.
[1]: https://www.jpx.co.jp/english/corporate/investor-relations/i...
However, you see, TSE YoY growth from 2017 to 2018 is roughly 4 million USD. Growth is hard as it is for TSE, leaving money on the table like this time definitely hurts.
The line of reasoning “well, no one died” is a classic example of humans’ unfortunate tendency to round small numbers to zero in utilitarian calculations, which leads to all sorts of bad decisions when you’re dealing with things that effect lots of people in small ways.
If the market closing is so bad for its participants, why aren’t they lobbying to keep it open past 4PM? Or on Saturdays?
Or at least adopt the retail model where they get some more retail traders by operating some weeknights/weekends.
Most equity exchanges are only open or liquid during local business hours. US markets are open longer, but generally illiquid and there are fewer protections outside of "market" hours.
I think for equities, nobody wants to be a market maker 24/7 without a sufficiently wide spread to protect them from news events such as the death of an executive. So even with 24/7 markets you'd probably see very poor conditions outside of core hours. With derivatives, there's more interest in never sleeping. The world is a very interconnected place and less hinges upon a single person's death.
That doesn't mean I think anything can't be measured or fit into some sort of framework, I just think there is some fundamental truth in the rounding to zero you refer to, that needs to be accounted for. It's too glib to dismiss it.
Why not?