May 8 (Bloomberg) -- Two years after the frightening spring
day when the Dow Jones Industrial Average lost and regained
about 600 points in a matter of minutes, we still don’t really
know why. This is a problem, because it means something similar
-- or worse -- could happen again.
The Flash Crash of May 6, 2010, was more than a mere
technical glitch. A hedge fund in Dallas lost several million
dollars when the price of options it was buying suddenly spiked
from 90 cents to $30 per contract. A man named Mike McCarthy
lost $17,000 because his order to sell shares in Procter &
Gamble Co. happened to be executed at roughly 2:46 p.m., just
after the price hit rock bottom.