Financial Times (October 4)
2010/ 10/ 05 by jd in Global News
The Securities and Exchange Commission (SEC) released its findings on the May 6 Flash Crash when the Dow Jones Industrial Average dropped 1,000 points before bouncing back…all in a breathtaking 20 minutes. The cause was an institutional investor’s $4.1 billion sale of so-called “e-mini” futures contracts to hedge against an equity position. The trade appears to have been legitimate. The SEC must take action to ensure legitimate trades don’t result in excess volatility that scares investors away from stock markets. Measures should include circuit breakers and regulation of high-frequency traders, including requirements that they serve as market makers.
Tags: Circuit breakers, Dow Jones, Flash crash, SEC, Traders
