Cause of May 6 crash found

Discussion in 'Trading' started by hippie, May 14, 2010.

  1. BS. 75K in S&P Future sell orders would not cause a sell off of the underlying securities and a plethora of securities and currencies not contained in the index.
  2. Without the HFTs, this alone is unlikely to cause the crash.
  3. timcar



    Good observation.
  4. Lol... The process of getting a scapegoat to take all the blame for the blatant market manipulation of May 6 with the bailout money from last year...
  5. CET


    There were multiple factors. First a move in the Yen/Dollar. I don't trade currencies, but the FXY hourly chart shows this spike.

    Then the morons at the NYSE decided to halt trading by the specialists for 90 seconds while the ECNs kept trading. This removed almost all the liquidity in these stocks, and even a tiny volume would cause huge price moves.

    It appears the emini transaction was the icing on the cake with the associated moves it caused.
  6. LEAPup


  7. It was the leveraged ETF's and their algorithmic trading computers.
  8. One thing I noticed is that a lot of solid "dividend" paying stocks had a deeper "V" than some other stocks. I tend to think the May 6 crash was executed by some elite traders.
  9. BeatsDD


    It probably didn't help that blackrock liquidated a bunch of funds
    #10     May 17, 2010