They all rush for the entry or exit door at the same time. Hence the extreme price volatility. Clearly the above chart speaks to the fact that volatility has increased markedly over this decade. We attribute this directly to many traders acting upon like information simultaneously at low trading costs on a per share basis. It gapped open plain and simple.
Prices often gap to new levels as opposed to ascend or descend in somewhat of an orderly fashion.
Discount commissions do not cause volatility directly, it's just that cheap commissions have allowed swelling amounts of investors of all sophistication levels to play the game on a simultaneous basis with very little friction . Again, from a long run efficiency standpoint, closing these spreads adds to price efficiency to the benefit of all shareholders. Especially in a market such as this where broad investor focus is funneled into a few handfuls of issues. It's simply a losers game for brokerage firms to risk their own capital to accommodate liquidity for a large number of issues. After all, brokers are simply not in business to be benevolent.