Tue, 08 May 2012 02:30:32 GMT - High Frequency Trading Review
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 Dallaslost 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.
