What can cause markets fai?

how could market fail?

no liquidity. Something so catasrophic that there is not enough buyers to execute trades. Other than that the technology that makes the markets work get a virus and fail.

more sellers than buyers.

You ask how can a market FAIL not why they FALL.....

On the major exchanges the market makers step in to provide liquidity. They are required to do this even when things get ugly so that orders get filled.

I suppose if there was a major breakdown in the market maker's ability to perform this function then we could have a temporary market failure....similar to what happened in 1987. Since then "circuit breakers" have been put in place to halt trading temporarily if the market drops by a certain level over a certain period of time.

Exactly like the second answer said. If more people are dumping stocks than buying, markets fall. If companies do not meet their expected returns over the course of a year or so, people tend to run for the hills.

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