ASIA HK13 Aug 2019 10:35
in crisis mode wouldnt take much for a flash crash in Asia remember this well:
The term "flash crash" gained popularity in 2010 when on May 6, the S&P 500 declined 7% in less than 15 minutes, and then quickly rebounded. This was driven in part by flash crashes in individual stocks. For example, Accenture (ACN) hit $0, but closed the day at $41.09, which was marginally down from the open. The term stuck, but while 2010 was the "big one," flash crashes still occur today. 2015 brought its share of flash crashes where price plunged in minutes.
Monday, August 24, 2015
This date is embossed on many trader's memories. The S&P 500 opened at 1965.15 and within minutes fell to a low of 1867.01, a 5% decline. Intraday the market gained back most of the loss, but toward the close of trading stocks fell again, ending the day 3.66% below the open. The S&P 500 is tracked by the SPDR S&P 500 (SPY) ETF.
The sell-off was fueled by a combination of factors. The main catalyst for the selling was that the market had already experienced strong selling on August 20 and 21, leaving investors wary heading into the weekend. Asian markets open before US markets, and on Monday morning, the Chinese Shanghai Composite Index fell 8.5%, which led traders in U.S. markets to pull their buy orders and hit the sell button. With few bids, sell orders overwhelmed any buy order present, pushing prices lower.
Due to the lack of bids, many stocks on the NYSE were delayed in opening, according to CNBC. But with some stocks trading and others not, the fair value of ETFs and futures products couldn't be established. This caused further unrest, causing traders to sell more and bid less in those initial moments of August 24.
As the trading day got underway, more traders stepped into the market, and prices stabilized. The S&P 500 ultimately bounced off the August 24 low and closed out 2015 at 2043.94.
Wednesday, March 18, 2015
This flash crash affected traders who were trading the US dollar, which fell more than 3% in under four minutes according to Nanex. However, most of the loss was erased in the next few minutes. For EUR FX (6E) futures, which are based on the EUR/USD exchange rate—it was the largest price swing within five minutes in the last four years. The Euro can also be traded via the CurrencyShares Euro (FXE) ETF.
The spot EUR/USD exchange rate traded at 1.0837 at 4 p.m. EST and went as high as 1.1040, a nearly 2% move in under five minutes with no specific catalyst. Since spot currency market are not traded on a centralized exchange, the moves seem by some traders could have been much larger based on their broker. Major currencies typically move 1% or less in a day, so a multiple percentage point move in minutes is highly irregular, especially at this time of day and without a news catalyst.
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