|
They tend to kick in when an index (or specific stock, whatever one's set for) hits a pre-determined number. They are a major reason for the use of "curbs" which stop trading if an index falls more than X points (Dow is 100 pts. for previous day's close). and yes, many traders have the discretion of when to trade--auto-programs are mainly big instutions and the like.
A lot of big traders use specific ploys, such as selling short during the day (thus lowering prices), then buying in the last half hour at those reduced prices to cover the sales.(Think of it as offering to sell apples you don't have at $5, watching the prices fall then buying the apples for $3 to deliver to the buyer) Others see the lower prices as bargain buying time. When there is a run-up during the day, some traders will sell off at the end what they bought in the morning and take the profits. This results in a drop in the final minutes.
Hope that helped a bit.
|