JPMorgan Has New Theory About What Really Caused the Flash Rally

  • `Data suggest the cash market broke first,' analyst says
  • Vanguard Treasuries trader among those using futures more now

JPMorgan's New Flash-Rally Theory Points to Cash Market

Some 16 months after the “flash rally” in U.S. Treasuries blindsided Wall Street traders, little about what exactly went wrong has been resolved. The most common, albeit tenuous, explanation is that the futures market seized up that morning, creating a spillover effect into cash bonds that led to a frenetic 12-minute spike in prices.

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