Case 8 ITM 100.docx - Mikhail Pereira Case 8 Flash crash a...

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Mikhail Pereira 2018-11-20 Case 8: Flash crash a new culprit 1. The experts originally believed that the crash took place because of structural and organizational features of the electronic trading systems that execute the majority of trades on the Dow and the rest of the world’s major stock exchanges. The once stock exchange specialists have been replaced by high-frequency traders. These HFTs are mainly automated and use algorithms to place nearly instant trades. When the flash crash occurred, the algorithms were not sufficient enough to handle the complexity of the event in progress and made the situation much worse. 2. Management: After the flash crash, the several reforms that were implemented should have been implemented in the first place in order to prevent scammers like Sarao from manipulating the market. Organization: Sarao was not fully investigated by the exchange and proper action was not taken against him. If he was dealt with in the first place, the entire flash crash could have been avoided. The organization should have done a better job investigation him and
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  • Fall '12
  • AlecCram
  • Stock exchange, Sarao

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