What Caused the Flash Crash Of May 2010-The Fastest & Deepest US Stock Market Plunge Ever

Stock markets are different from what they were some 50 years back. Today stock markets are highly susceptible to algorithmic induced collapses known as flash crashes. As a trader or an investor you should understand how the modern stock market functions and how these flash crashes can develop. Stock market crash of 2008 has been mainly blamed on quantitative traders also known as quants. On May 6th, 2010, it happened again. The US Stock Market experienced the fastest and the deepest plunge ever. That afternoon, American share and futures indices went into a seemingly inexplicable tailspin, falling 10% in a matter of minutes, with some blue-chip shares briefly trading at a penny, only to recover most of the lost ground before the end of the trading day. The short-lived plunge raised awkward questions about whether trading rules had failed to keep up with markets that now handle orders in milliseconds. Watch this video documentary also that tries to recreate what happened on that fateful day.

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