Flash Crash

The increasing complexity of financial markets can leave them prone to flash crashes and system outages, as well as make them targets for cyberattacks.
Tonight’s leap second will provide a major test for Wall Street’s technology resilience in the post–Flash Crash era.
In the case of Nav Sarao, the alleged flash crash trader arrested April 21, the prosecution will likely focus on the defendant’s intent.
Michael Lewis’s Flash Boys has created a buzz about electronic trading, but investors should not forget the role that human traders still play.
An editor’s journey into the world of high-speed trading and proprietary algorithms that make or break markets.
New rules prescribe far-more-detailed pretrade risk analysis and real-time order surveillance across multiple asset classes and markets. The push for compliance could present opportunities for technology providers.
The ability to crash or negatively impact financial markets would be an incredible cyber-warfare tool.
SEC’s Mary Schapiro carves out the single-stock circuit breaker response. “It’s an orderly, organized way to deal with this. We will add additional stocks after the pilot,” says Schapiro.
Money managers, brokers and traders are showing little resistance to regualtory measures to combat, mitigate and decipher any future “flash crash” event.