'Flash crash' saw Apple shares gain 40,000 per cent
Friday 21 May 2010
Shares of the iPad maker Apple soared 40,000 per cent and traded at $100,000 apiece during the "flash crash" of 6 May, it was revealed yesterday. More details have emerged of the chaotic 20-minute trading period, when the US stock market fell 9 per cent before just as suddenly rebounding, including the fact that aberrant trades were by no means all in one direction.
The details point to a system-wide withdrawal of liquidity as the main contributor to the event, among numerous other factors. And they put the focus on the practice of electronic market-makers putting in "stub quotes" at extreme prices, not ever expecting them to be traded on.
Mary Schapiro, the chairman of the Securities and Exchange Commission, told a Congressional hearing yesterday that stub quotes are used by professional liquidity providers, who are given special trading privileges in return for agreeing to always provide buy and sell quotes for shares. Apple was one of five stocks in which trades were executed at the artificially high price; many others traded at the extremely low price of one cent.
The Dow Jones plunged 998 points that afternoon, as concerns about Greece spiralled into a wider sell-off in derivatives designed to track the market. Earlier declines triggered a wave of orders to sell at any price, and liquidity appeared to dry up in many stocks.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...