May 13, 2010
Big bets by a single trader on Chicago’s derivatives exchange could be the key to Thursday’s so-called “flash crash” on Wall Street, in which the blue-chip Dow Jones industrial average fleetingly dropped by almost 1,000 points.
Regulators are examining the actions of an unnamed individual who executed a rapid series of hefty, bearish trades over a 19-minute period on the Chicago Mercantile Exchange.
The trades amounted to 9% of volume on the Standard & Poor’s e-mini futures contract, which is the largest futures account tracking US stock prices.
Gary Gensler, head of the commodity futures trading commission, told Congress that the trader entered the market at 2.32pm on Thursday and stopped trading at 2.51pm – the very period when the Dow plummeted by a record-breaking 998.5 points, before quickly recovering ground.
This article was posted: Thursday, May 13, 2010 at 4:08 am