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 profits gained by Qunxing Capital from its involvement in various major products soon exceeded the US$30 billion mark.
So much money!
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 a price 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 US$0.01.
Although it is not much, there are indeed transactions at this price, which can increase 3,500 times in just ten minutes.
What a roller coaster!
What is the ups and downs!
What does it mean to win hemp, to win hemp, to lose hemp, to lose hemp!
At this moment, the U.S. stock market is demonstrating to all traders...
Procter & Gamble's stock price also rebounded to above US$57, a rebound of 45 percentage points from the 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 the 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 continue to regain their lost ground.
The three major indexes also began to continue to rise.
The largest intraday drop in the 114-year history of the Dow Jones Index occurred and ended in a very short period of time.
It seemed like just a nightmare.
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. .
There is no doubt that Qunxing Capital is one of the winners in making money.
The specific losses caused by this short-lived and violent fluctuation are difficult to estimate. The media in Europe and the United States have already exploded. What happened in the capital market was reported by various media immediately, and it was also spread to the country.
However, mainland 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 has just begun to ferment.
Soon, multiple inside sources rumored that it was a trading error by a Citi trader, making the entire Flash Crash incident even worse.
The legendary black 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 sharply and eventually triggered program trading.
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.
Some people think that it is unreliable that traders' keystroke errors caused the market to dive. Citigroup's "e-mini" total volume that day was only US$9 billion, which is still a long way from US$16 billion.
However, some observers expressed different views, believing that there should be more than one source of wrong transactions.
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.
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Citigroup denied three times in a row!
A person close to Citigroup said that the erroneous e-mini transaction originated from the CME Group.
Citigroup dumped the blame on CME Group.
When CME Group saw this situation, it thought to Madfak, can it handle this? CME Group immediately issued a statement saying that it had not found any problems in its trading system, and at the same time expressed cordial greetings to Citigroup in its heart.
Soon, the New York Stock Exchange and Nasdaq also hurriedly stepped out to distance themselves from each other.
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.
Well, there are no problems, everything is clean...
Then here comes the problem.
Who did it?
Who is that 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!
right--!
Programmed trading must be causing trouble!
A tacit consensus was quickly reached that the flash crash of the stock market was caused by programmed trading!
If something goes wrong, someone has to take care of you.
This programmed trading is the best target!
However, when something like this happens, it is certainly 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.
At around 6:30 pm local time in North America, U.S. Treasury Secretary Timothy Geithner held an emergency conference call. Ben 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.
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.
But such a result is unacceptable to the White House. Trillions of dollars have evaporated from the market, and the reason behind it can't be found?
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.
Their task was 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 were all targets of the investigation.
It wasn't until five years later that the investigation team zeroed in on Sarao, but that was all a story later.
But now that things have happened, no organization or individual has jumped out to take responsibility.
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."
Unlike 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 pressed the wrong button, but traders from multiple institutions made the wrong button at the same time. This cannot be justified and cannot be justified.
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