Credit Suisse has issued an interesting note* on the so-called “Flash Crash” which took place on 6th May whilst the UK was preoccupied with the Election, making some interesting points:
1. Despite the appointment of a joint CFTC-SEC Committee to investigate the causes of the Crash, there is still no explanation.
2. The sheer scale of the moves: 1 in 25 stocks lost more than 20% of their value, and $700billion of market value was vaporised, albeit temporarily.
3. Liquidity dried up in Exchange Traded Funds in particular.
*to access the Credit Suisse note, go to http://www.tabbforum.com/researches/just-released-credit-suisse-aes-analysis-the-flash-crash-rehashed. You will need to register as a member.