Chapter 363 [America's stock exchanges are dumping their pots one after another]
At 14:45:28 p.m. EST, the emergency mechanism of CME Group was triggered, and the transaction was forcibly stopped.
As the transaction resumed again, the huge empty orders suddenly disappeared!
At this time, the three major indexes in North America also began to soar rapidly, and a trader in the trading hall shouted excitedly: "It rebounded, it rebounded violently—!"
This scene was really too exciting, and everyone present was extremely excited.
After a while, another trader shouted with extreme excitement: "Hahaha, it's numb, we are going to make a lot of money, just after the shorts finished eating, the longs' profits started to run wild, and the long-short profits have accumulated to 28 billion US dollars. It's still increasing, it's still increasing, and it's going to break through 30 billion US dollars, and the Wozhinima money printing machine is not so fast!"
Really excited.
Qunxing Capital's profit scale from its involvement in various varieties soon exceeded the US$30 billion mark.
It's hard to make money!
As time passed, half an hour later, the three major North American indexes recovered most of the lost ground, and Accenture's stock price also rebounded from the price of US$0.01 to the price of US$35 before becoming relatively stable.
The intraday flash crash fell to -99.97%, and then rushed up in just ten minutes, rebounding from $0.01 to above $35, an increase of 3500 times.
Judging from the exchange of hands on the disk, someone actually bought it at the price of 0.01 US dollars.
Although there are not many, there is indeed a transaction at this price, which directly realizes a 3,500-fold increase in ten minutes.
What is a roller coaster!
What is ups and downs!
What is winning hemp, winning hemp and losing hemp, losing hemp!
At this moment, the U.S. stock market is showing all traders a...
Procter \u0026 Gamble's stock price also rebounded above $57, a rebound of 45 percent from the lowest point; Apple's stock price also rebounded from $199.25 to above $240, a rebound of more than 20 percent; 3M also rebounded from the lowest point of $67.98 Above $83, the rebound exceeded 22 percent...
Other stocks such as ExxonMobil, Disney, Cisco, Google, Oracle, Nike, Visa, etc. all rebounded violently after the plunge and continued to regain 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 Industrial Average occurred in a very short period of time and ended in a very short period of time.
As if it was just a nightmare.
But it is not a dream, but a fact that actually happened. The result is that some people earn a lot of money, while some people lose everything, or even go bankrupt, and countless people's wealth is harvested away. .
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 count. The media in Europe and the United States have already exploded. What happened in the capital market was first reported by various media, and it was also spread to China.
However, stockholders in the mainland are basically sleeping. Except for some night owls, most of them are unaware of the flash crash in the US stock market.
As most of the losses of the three major US stock indexes have been recovered, the flash crash event has just begun to ferment.
Soon, multiple inside sources rumored that this was a trading error by a Citi trader, making the entire flash crash even worse.
The legendary oolong finger?
Some media broke the news that a trader suspected of being Citigroup mistakenly typed "M (million)" into "B (billion)" when executing a stock transaction, which triggered at least one of the Dow components of Procter \u0026 Gamble. A sharp drop, and eventually trigger a program transaction.
Procter \u0026 Gamble’s share price fell from $60 to $39.37 in a flash. Another company, 3M, also dropped from $85 to around $72. Accenture’s share price plummeted from $40 to only 1 cent left.
Some people think that it is unreliable for traders to make mistakes in keystrokes to cause the market to plunge. The total amount of Citigroup's "e-mini" on that day was only 9 billion US dollars, which is still far from 16 billion US dollars.
However, some observers expressed different views, believing that there should be more than one source of wrong transactions.
All kinds of news were flying all over the sky, and Citigroup reacted quickly. It immediately issued a statement saying that the company and other financial groups will be committed to investigating the real culprits that caused the huge fluctuations in the market. However, there is no evidence that Citigroup is involved in this. transaction error.
Citigroup made a triple denial!
A person close to Citigroup said that the wrong e-mini transaction came from CME Group.
Citigroup blamed CME Group.
Seeing the situation, CME Group sent a sentence to Madfac in its heart, can this pot be taken care of? CME immediately issued a statement saying that it did not find any problems in its trading system, and at the same time expressed its cordial greetings to Citigroup.
Soon, the New York Stock Exchange and Nasdaq also jumped out to distance themselves.
The New York Stock Exchange stated that no technical failures were found in the trading system during the plunge, and Nasdaq also said that there was no problem with my trading system, and this matter has nothing to do with me.
Well, there's nothing wrong with it, it's all clean...
So here comes the problem.
Who did it?
Who is that mysterious big bear?
How much money did the bears make off of this catastrophic crash?
The major exchanges and institutions in the financial circle have distanced themselves from each other, and soon they found a target to carry the pot - programmatic trading!
right--!
It must be programmatic trading that is playing tricks!
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 it.
This programmatic transaction is the best object!
However, the occurrence of this incident is definitely not the result of several major exchanges and financial institutions denying it three times in a row, and the matter is still in the process of fermentation.
At around 6:30 p.m. local time in North America, U.S. Treasury Secretary Geithner held an emergency conference call. Bernanke, then-in-charge of the Federal Reserve, Shapiro, then-in-charge of the US Securities and Exchange Commission, and many other leaders of North American financial authorities were all present.
There was only one question gathered for discussion, and that was what the hell happened in the afternoon!
From computer glitches to trader mistakes, from black technology attacks to terrorists, almost all answers have been ruled out.
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?
In the end, a special investigation team was temporarily established, and its members included financial giants, regulatory agencies, Nobel economists, FBI agents, and twenty top lawyers.
Their task is to thoroughly understand this matter. The investigation team decided to start a large number of visits, including not limited to reviewing a large number of transaction records and financial documents, and investigating major financial entities, ranging from small securities companies to global pension funds.
It wasn't until five years later that the investigation team locked Sarao, but that's all for later.
And now things have happened, and no organization or individual has jumped out to take responsibility.
But this unprecedented flash crash always needs a reason, so it entered the classic hindsight link to find a reason. People in the Wall Street financial circle pointed their finger at a derivative called "dynamic hedging".
Unlike other derivatives, one of the design functions of this tool is to issue a buy order when the market rises and a sell order when the market falls.
As a result, when the broader market plummeted, dynamic hedging tools sent 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, one trader can still say that he has pressed the wrong button, but at the same time, traders from multiple institutions have made the wrong button.
...
