This Sunday, 5/6/12, will be the 2nd anniversary of the “Flash Crash.” The Flash Crash will be remembered for seeing the Dow 30 lose about 1,000 points in a matter of minutes, then recovering in a matter of minutes. The round trip down then back up took about 20 minutes. The day was also interesting because many stocks traded at the lower “stub quote” price of 1 cent per share. A few issues traded at the upper stub quote of “99,999.99” per share. Wikipedia has a nicely written history of the day, plus different theories and explanation for what occurred. [1] The official explanation written jointly by the SEC and Commodities Futures Trading Commission largely blamed a large trade by mutual fund company Waddell-Reed. [2] I took strong issue with their explanation of the crash. [3]
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