Flash-Crash Story Looks More Like a Fairy Tale
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May 8 (Bloomberg) -- Two years after the frightening springday when the Dow Jones Industrial Average lost and regainedabout 600 points in a matter of minutes, we still don’t reallyknow 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 meretechnical glitch. A hedge fund in Dallas lost several milliondollars when the price of options it was buying suddenly spikedfrom 90 cents to $30 per contract. A man named Mike McCarthylost $17,000 because his order to sell shares in Procter &Gamble Co. happened to be executed at roughly 2:46 p.m., justafter the price hit rock bottom.