Flash Crash spotlights financial IT risks (Institution of Engineering and Technology)

By | September 13, 2010

The Flash Crash may very well be talked about more these days than the credit crisis.  Not only is it an area of interest for regulators and traders but technologists as well.  IET takes a look at the issue from a technology perspective in this article.

‘It seems to be more of a market structure issue,’ says Tabb Group’s Kevin McPartland. He points out that the collapse was fast, but the recovery from the situation where valuable shares were offered for a penny each came equally quickly.

‘Did it happen quickly because of the technology? Of course. But the rebound was also fast. Algorithms were able to spot what was going on, and to see a buying opportunity. In previous years, [in a situation like 6 May] the markets would have had to close for the rest of the day.’

Read the full article here.

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