The puzzle surrounding the mysterious crash on the New York Stock Exchange five months ago has been solved. According to the U.S. regulatory authorities at that time, a single trader caused a dramatic slump in the everyday business of the world's most famous stock index. "
Washington / New York - According to Dow Jones fell on 6 May at a full 10 percent because a mutual fund a transaction of futures contracts unusually quickly unraveled, as U.S. media reported on Saturday. At the time in minutes was a market capitalization of just over 800 billion U.S. dollars have been destroyed. 104 pages describe the SEC and CTFC, like a really quite ordinary trade a disastrous chain reaction set in motion - and thus caused the most points after plunging stock prices since 1987.
starting point for the so-called "flash crash" was the sale of 75,000 so-called E-mini securities had been - actually a regular hedging transactions. But, given the 4.1 billion dollars (three billion euros) rather large volume and the rapid settlement of the transaction by a computer program a domino effect was triggered.
The market is due to the debt crisis in Europe was already very nervous and so did the transaction triggered a huge sell-off, it said in the final report. Within minutes, attracted players from their money and burned to about 800 billion dollars in stock market values. It then took an eternity, got up, traders on the floor of the situation under control. As fast as the prices have fallen, it increased again.
The name of the fund is not mentioned in the paper, is the media reported it but the relatively small U.S. brokerage firm Waddell & Reed, which enjoys because of its reliability and long experience a good reputation. Back in May, the company said it had never intended, with their trade, the Markets seem to mind. Also in the report of the company is accused of any wrongdoing.
high-speed trade is a problem, regulatory controls against
background for the shock of today's predominant high-speed automated trading on the stock markets. Use computers for mathematical models to buy within milliseconds partly huge numbers of shares or to sell. Nearly two-thirds of all stock market activities in the United States are handled in this way. The sinister transaction in May lasted for only 20 minutes and not as is usually several hours.
The SEC, in response to the "flash crash" already have a new backup system introduced shares from the major index S & P 500 will be suspended from trading when the price within five minutes to more than 10 percent changed. This is to give people the opportunity to iron out any errors of electronic trading systems.
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