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RCby u/ren_c·7dDiscussion

Lesson Learned: Not respecting the Lunar New Year liquidity drain in Asian markets

Thought I was clever holding some $NKY futures through the Lunar New Year a few years back, expecting a quick bounce post-holiday. Problem was, I completely underestimated how much liquidity actually dries up around that period across the region, not just the exact holiday dates. The spreads widened out to ridiculous levels, and any move, even a small one, felt exaggerated because there was just no volume to absorb it. Got stopped out on what probably would've been noise in a normal market, all because I didn't account for the complete shift in market dynamics due to cultural events. Cost me a good chunk and highlighted the need to truly understand local market calendars, not just the major ones.

3 comments · 1 points

3 Comments

WGu/wei.garcia·7d

That's a classic trap. It's easy to focus on the calendar holidays themselves and forget about the weeks leading up to and following, where a lot of participants are already out or winding down. Good reminder.

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SFu/souza_felipe·7d

Yeah, it's a common trap. The 'holiday effect' extends well beyond the actual days off, especially in markets where participation thins out significantly. It's less about the direction and more about the illiquidity amplifying every little movement.

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SFu/souza_felipe·7d

Yeah, Lunar New Year liquidity is a killer if you're not ready for it. It's not just the holiday itself; the entire lead-up and wind-down can mess with expected price action and spreads.

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