Chapter 363 [All the exchanges in the United States are dumping their pots one after another]
At 14:45:28 pm Eastern Time, the CME Group’s emergency mechanism was triggered and trading was forcibly stopped.
As trading resumed again, the huge short orders suddenly disappeared!
At this time, the three major North American indexes also began to soar rapidly. A trader in the trading hall shouted excitedly: "It has rebounded, it has rebounded violently——!"
This scene was so exciting that everyone present was extremely excited.
After a while, another trader yelled extremely excitedly: "Hahaha, we're going to make money. As soon as the shorts finished eating, the profits of the longs began to run wild. The profits of the longs and shorts have accumulated to 28 billion U.S. dollars.
It’s still increasing, it’s still increasing, it’s going to exceed 30 billion U.S. dollars, even Wozhnima’s money printing machine is not that fast!”
Really excited.
The scale of profits gained by Qunxing Capital from its involvement in various major products soon exceeded the US$30 billion mark.
So profitable!
As time went by, half an hour later, the three major North American indexes recovered most of their losses, and Accenture's stock price rebounded from a price of US$0.01 to above US$35 before becoming relatively stable.
The intraday flash crash dropped -99.97%, and then surged back in just ten minutes, rebounding from US$0.01 to above US$35, an increase of 3,500 times.
Judging from the transactions on the market, someone actually bought it at a price of $0.01.
It seems like just a nightmare.
However, some observers expressed different views, believing that there should be more than one source of wrong trading.
The New York Stock Exchange said it found no technical glitches in its trading system during the plunge, and Nasdaq also said there was no problem with my trading system and that the matter had nothing to do with me.
But it is not a dream, but a fact that actually happened. The result is that some people make a lot of money, while some people lose everything or even go bankrupt. The wealth of countless people has been harvested in this way.
.
A tacit consensus was quickly reached that the flash crash of the stock market was caused by programmed trading!
Some people think that it is unreliable that a trader's keystroke error caused the market to plunge. Citigroup's "e-mini" total volume that day was only US$9 billion, which is still a long way from US$16 billion.
There is no doubt that Star Capital is one of the winners in making money.
Citigroup dumped the blame on CME Group.
At around 6:30 pm local time in North America, U.S. Treasury Secretary Geithner held an emergency conference call. Bernanke, the then top leader of the Federal Reserve, and Shapiro, the then top leader of the U.S. Securities and Exchange Commission, were all present.
Then here comes the problem.
But now that things have happened, no organization or individual has jumped out to take responsibility.
The three major indexes also began to continue to rise.
Citigroup denied three times in a row!
A person close to Citigroup said that the erroneous e-mini transaction originated from the CME Group.
There was only one question that came together to discuss, and that was what the hell happened in the afternoon!
From computer glitches to trader errors, from tech attacks to terrorists, almost all answers have been ruled out.
This programmed trading is the best target!
At this moment, the U.S. stock market is demonstrating to all traders...
It is difficult to estimate the specific losses caused by this short-lived and violent fluctuation. The media in Europe and the United States have already exploded. What happened in the capital market was immediately reported by various media, and it was also spread to the country.
Although it's not much, there are indeed transactions at this price, which can increase 3,500 times in just ten minutes.
In the end, a special investigation team was temporarily established, whose members included financial giants, regulatory agencies, Nobel economists, FBI agents and twenty top lawyers.
Soon, the New York Stock Exchange and Nasdaq also hurriedly stepped out to distance themselves from each other.
Who did it?
Well, there is no problem, everything is clean...
But such a result is unacceptable to the White House. The market has evaporated trillions of dollars, and the reason behind it can't be found?
right--!
Programmed trading must be causing trouble!
However, when something like this happens, it is definitely not possible for a few major exchanges and financial institutions to deny it three times and it will be over. The matter is still fermenting.
What does it mean to win hemp, to win hemp, to lose hemp, to lose hemp!
It wasn't until five years later that the investigation team zeroed in on Sarao, but that was all a story for another day.
Various news were flying all over the sky, and Citigroup responded quickly. It immediately issued a statement saying that the company and other financial groups would be committed to investigating the real culprits that caused the huge market fluctuations. However, there is currently no evidence that Citigroup was involved in this.
Transaction error.
Procter & Gamble's share price plummeted from US$60 to US$39.37. Another company, 3M, also flashed from US$85 to around US$72. Accenture's stock price plummeted from US$40 to just US$72.
1 cent left.
Procter & Gamble's stock price also rebounded to above US$57, a rebound of 45 percentage points from its lowest point; Apple's stock price also rebounded from US$199.25 to above US$240, a rebound of more than 20 percentage points; 3M Company also rebounded from its lowest point of US$67.98
When it reached above $83, the rebound exceeded 22 percentage points...
Other stocks such as ExxonMobil, Disney, Cisco, Google, Oracle, Nike, Visa, etc. all rebounded quickly and violently after plummeting to continuously regain their lost ground.
The largest intraday drop in the 114-year history of the Dow Jones Index occurred and ended in a very short period of time.
But this unprecedented flash crash had to have a reason, so it entered the classic second-guessing phase to find a reason. People in the Wall Street financial circle pointed the finger at a derivative instrument called "dynamic hedging."
Their task is to thoroughly understand this matter. The investigation team decided to start a large number of visits, including not only reviewing a large number of transaction records and financial documents, but also investigating major financial entities. From small securities companies to global pension funds, they are all targets of the investigation.
Soon, multiple internal sources rumored that it was a trading error by a Citi trader, making the entire Flash Crash incident even worse.
If something goes wrong, someone has to take care of you.
Who is the mysterious big short?
How much money did the short sellers make taking advantage of this catastrophic crash?
Major exchanges and institutions in the financial circle have distanced themselves from each other, and soon they found a target to take the blame - programmed trading!
However, mainland stock investors are basically sleeping. Except for some night owls, most people are unaware of the flash crash in the US stock market.
With most of the losses in the three major U.S. stock indexes having been recovered, this flash crash event has just begun to ferment.
The legendary Oolong finger?
Some media broke the news that a suspected Citi trader mistakenly typed "M (millions)" into "B (billions)" when executing stock transactions, triggering at least one Procter & Gamble Dow component stock.
It fell rapidly and eventually triggered program trading.
What is a roller coaster!
What is the ups and downs!
When CME Group saw this situation, it thought to Madfak, can this pot be taken? CME Group immediately issued a statement saying that it had not found any problems in its trading system, and at the same time expressed its heart to Citigroup
Kind regards.
Different from other derivatives, one of the design functions of this instrument is to issue a buy order when the market rises and a sell order when the market falls.
The result is that when the market plummets, dynamic hedging tools send out many sell signals, amplifying the market's decline.
As for the trader pressing the wrong key, it can only be said to be one of the possibilities.
To take a step back, it can be justified if one trader made the wrong call, but traders from multiple institutions made the wrong call at the same time. This cannot be justified and cannot be justified no matter what.
