Flash Crash 2010
About Flash Crash 2010
On May 6, 2010, the Dow Jones plunged nearly 1,000 points in minutes, then recovered most of the loss within the hour. The flash crash was the first major disruption caused by high frequency trading. Some stocks traded at pennies while others traded at thousands of dollars. The SEC implemented new circuit breakers and trading curbs. In 2015, a British trader, Navinder Singh Sarao, was arrested for contributing to the crash through spoofing algorithms. The flash crash revealed the fragility of computer driven markets and the systemic risks of high speed trading.
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