On May 6, the Dow plunged hundreds of points in a matter of minutes for reasons that most investors couldn’t explain. The incident has become known as the “flash crash” in investment circles.

By Joe Tauke – The Daily Caller

EXCERPTS:

“I don’t think anyone is sure what caused it,” Professor Craig Pirrong of the University of Houston told The Daily Caller. “And the SEC’s explanation has been underwhelming, to say the least.”

Most people think that there hasn’t been a flash crash since that day, but that’s not entirely true. There hasn’t been a flash crash in the entire market since that day. There have, however, been flash crashes in individual stocks, including Intel, Seagate Technology, and Progress Energy. Each has experienced a sudden and massive price drop, followed by an equally sudden and massive increase in price. The phenomenon persisted throughout the summer, and has happened within the past month. Active traders who lost their shirts by selling at the wrong time were left wondering what mysterious force was causing these crashes.

FULL STORY

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