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Exclusive: Presenting The Flash Crashes Of 2010 - Part 1

Tyler Durden's picture


In an exclusive collaboration between Nanex and Zero Hedge, we are pleased to present to our readers the first part of a multi-series project that will demonstrate the flash crashes of 2010, and subsequently, of 2009 and 2008. The concern is that since the number of mini crashes, precipitated in most part by HFT algorithms gone wild, is simply staggering, it is impossible to present all the individual events in one presentation due to size limitations. The reason - there have been 549 "flash crash" events in 2010 to date alone! We dare anyone at the SEC to go through this list and look anyone in the eye and tell them that i) the market is not broken and ii) that High Frequency Trading is not a major scourge to proper and efficiently operating markets. And while we do not want to take away from the recent uproar at ETFs, courtesy of the Kauffman foundation (and its chairman who as we presented earlier has a rather sizable conflict of interest in DST Systems, Inc) none of the presented 549 crashes are ETFs implicated: this is (mostly) all HFT, baby, all the way.

Without further ado, we present the first part of our joint presentation: the mini flash crashes of Q1, all 112 of them. As there are 64 work days between 1/1/2010 and 3/31/2010 (excluding holidays) this amounts to 1.75 mini crashes per day (and wait until you see Q2). And this is a market that the SEC would like to have you believe is perfectly operational...

The crashes are presented in chronological order.

We urge readers to distribute this report to friends and relatives, as we hope that people can finally understand what a complete and broken scam the US stock market is. That said, we expressly prohibit the creation of "per click" slideshow decks out of the underlying data.

The Flash Crashes of 2010 - Q1 (pdf)


Q1 Flash Crashes


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Tue, 11/09/2010 - 19:58 | 714250 HarryWanger
HarryWanger's picture

Thank you for this. And thank you for getting back on track after three "missile launch" posts.

This is the stuff that make ZH a great site.

Tue, 11/09/2010 - 20:29 | 714365 traderjoe
traderjoe's picture

Both sorts of articles make this a great site. Whether a missile launch (or your jet idea) is a relevant issue should be left to the reader, and not the editor, per se. One of my Top 10 favorite articles was on the Fahrenheit 451 book and the similarity to modern life. Was it financial? Not really. But it was informative. I like the mix of articles as it breaks up some of the monotony of some of the other financial sites. 

Speaking of which, I sold a couple of items on ebay, received the proceeds via PayPal and have donated a portion to ZH. I stopped my WSJ subscription a long time ago, and ZH provides much of that news to me. Just letting people know that ZH accepts PayPal...

Tue, 11/09/2010 - 20:33 | 714376 LoneStarHog
LoneStarHog's picture

Yes and, Tyler, please do not waste our valuable time with non-market events like a nuclear detonation, if/when one occurs.  Nothing outside of the markets affect the markets and, Tyler, you must understand this.

Tue, 11/09/2010 - 20:58 | 714461 Bill Lumbergh
Bill Lumbergh's picture

Thank you for a little humor tonight.

Tue, 11/09/2010 - 23:56 | 714870 thefatasswilly
thefatasswilly's picture

That's all people ever want nowadays. Humor, to cushion the effects of reality. Laugh it off, so it seems silly and ridiculous, and thus, less real.

Wed, 11/10/2010 - 04:20 | 715315 Herd Redirectio...
Herd Redirection Committee's picture

There is a balance needed in everything.  While most people are ignorant to the extreme, and it would be disheartening to see them laugh everything off, but for the well-informed we have to keep our sanity.   Sane when everything around you is insane.  And if that isn't funny, what is?

Wed, 11/10/2010 - 08:27 | 715806 Cdad
Cdad's picture

"Good comedy is tragedy narrowly averted."  W. Shakespeare

Keep the balance, TD.  And thank you for the work you do to keep the truth near to the surface...above the subterfuge of Iphones, stock price manipulations, and "Mystery Missles."

Wed, 11/10/2010 - 08:56 | 715829 Bill Lumbergh
Bill Lumbergh's picture

Save your energy and attack someone else brother.

Wed, 11/10/2010 - 11:14 | 716190 thefatasswilly
thefatasswilly's picture

Get the sand out of your vagina, Lumbergh. I didn't attack you; I didn't even begin to claim that I'm innocent of the condition.

Did you not notice my avatar?

I'm itching to insult you now, though.

Wed, 11/10/2010 - 15:06 | 717158 Bill Lumbergh
Bill Lumbergh's picture

Whatever man...could have fooled me.

Tue, 11/09/2010 - 20:50 | 714432 Dapper Dan
Dapper Dan's picture

Bugger off Harry, there, some one had to say it.

You stirred up shit on the other post,  but I followed you here.

If you can not tell the difference between a modern jet aircraft contrail and a missile launch  than you are hopeless, hapless, brainless, brainwashed.

Wed, 11/10/2010 - 03:11 | 715099 doomandbloom
doomandbloom's picture

what missile launch??! that was a friggin weather balloon.

Wed, 11/10/2010 - 05:40 | 715549 Hedge Jobs
Hedge Jobs's picture

dear Mr. HarryWanker, i quite liked the missile launch posts as im sure plenty of others did as well. Its geopolitical, its unreported and unexplained therefore it is relevant to this site. personally i would like to be infomred when rogue and random missiles are being launched. Judging by the amount of "junks" you are regularly getting on this site im strugling to work out what relevance you have here?

Tue, 11/09/2010 - 20:00 | 714256 Rahm
Rahm's picture

Rigged, female dogsss!!

Tue, 11/09/2010 - 20:05 | 714281 morph
morph's picture


Tue, 11/09/2010 - 20:06 | 714284 InconvenientCou...
InconvenientCounterParty's picture

Let us know when you can propose a way to trigger them or cross them up. I'm in.

Otherwise there's not anything new. Carrying a sign with a tri-fold hat isn't working.

Tue, 11/09/2010 - 21:04 | 714482 snowball777
snowball777's picture

I hear the power grid in Kansas is as fragile as the rest of America's rotting infrastructure.

We leave the rest as an excercise for the reader.

Tue, 11/09/2010 - 20:09 | 714296 MeTarzanUjane
MeTarzanUjane's picture

Beating the dead horse. It is now a widely accepted way to play the market brought to you by 4+1+1 from Reston.

Tue, 11/09/2010 - 20:22 | 714338 sarnuk
sarnuk's picture



Outstanding, and outstanding job outing the conflict of interest as well.

Tue, 11/09/2010 - 20:25 | 714350 Caviar Emptor
Caviar Emptor's picture

Flash Crashes make men out of dweebs. If your a trader or an investor, you haven't really developed your skills and come of age until you've come through your first Flash Crash.

-A message brought to you by The SEC Department of Public Relations.

Tue, 11/09/2010 - 21:03 | 714477 -1Delta
-1Delta's picture

So i was gone all day.. WTF with VXX? 

Tue, 11/09/2010 - 21:34 | 714563 threefingerscam
threefingerscam's picture

Reverse split.

For a laugh (repeated here):

iPath S&P 500 VIX Short Term Futures (NYSE: VXX) has gained record increase in its price in a single trading day. The VXX share has gained massive 300% in today’s trading session, one of the biggest increase in the history of VXX. The VXX stock current price is $45.26, up by $33.97 from its last closing price of $11.29. The stock is trading with lot of speculation and this could be judged by the fact that it has made its lowest price level of $11.01 in the month of November, 2010 and also made its 52 weeks high of $45.50 today, again in the same month of November, 2010.

Wed, 11/10/2010 - 02:43 | 715073 ebworthen
ebworthen's picture

That is scary, or funny, depending on your perspective.

The immediate image that comes to mind is someone betting every other number on the roulette wheel then scattering manure on the wheel itself.

What in the hell are we doing, really?

Wed, 11/10/2010 - 05:13 | 715468 Augustus
Augustus's picture

There was a reverse split.  Don't get alarmed yet.

Tue, 11/09/2010 - 20:29 | 714356 doomandbloom
doomandbloom's picture

   from CNBC today                                                                                                                                      ....Since the Dow Jones industrial average fell about 700 points then largely recovered on May 6, setting the financial world on edge, similar flash crashes have occurred with alarming frequency in more than a dozen individual stocks.



Tue, 11/09/2010 - 20:29 | 714361 lizzy36
lizzy36's picture

Tyler, how did ZH, and Nanex define "flash crash"? What parameters were used?

Tue, 11/09/2010 - 20:39 | 714399 Pool Shark
Pool Shark's picture

"Tyler, how did ZH, and Nanex define "flash crash"? What parameters were used?"

1) Did stock value fall appreciably?

2) Was Waddel & Reed trading that day?

Tue, 11/09/2010 - 20:40 | 714403 Tyler Durden
Tyler Durden's picture

Progressive bid (or offer) hitting (lifting) events without a news catalyst, and a subsequent reversion to the NBBO pre-event once the trading stimulus is eliminated.

Tue, 11/09/2010 - 21:01 | 714470 lizzy36
lizzy36's picture

Thank you.

You do good work.

Tue, 11/09/2010 - 23:12 | 714791 agrotera
agrotera's picture

Tyler, check out palladium two days ago--i think there was a flash crash on 2011 contracts but i forgot what time, i think it was the afternoon.

Tue, 11/09/2010 - 20:35 | 714382 B9K9
B9K9's picture

Two words: National. Security.

When you realize that the federal government has been directly involved with the fraudulent banking practices for the last 5, 10, 15, 20 years, you will begin to understand why the SEC is not an enforcement agency.

Tue, 11/09/2010 - 20:38 | 714395 Caviar Emptor
Caviar Emptor's picture

You got that right. The market was never "free" since 1987. "Market forces" are routinely trumped by political considerations and outright fraud. Mr market died. RIP. 

Tue, 11/09/2010 - 20:48 | 714424 B9K9
B9K9's picture

As von Clausewitz stated, war is a continuation of state policy by other means.

The key to ferreting out the truth about our banking system is to understand that the dollar reserve system is an essential component of our military control of critical natural resources.

The financial services industry not only provides the missing 'profits' & tax base absent from our lack of industrial production, but also serves as a strategic weapon in its own right as a means of advancing our geo-political objectives.

That is why I shake my head in wonder at the absolute lack of understanding when all the gold bulls trumpet the imminent death of the dollar. Look fellas, the US budget will be cut by 75%, we will default on a portion of Ts, and interest rates will be allowed to find a natural market equilibrium, before the reserve status is ever even remotely in peril.

But if you think little Ben (what is he, 5'6" with a 4 inch dick?) is the MOTU and can single-handedly dictate US domestic AND foreign policy, why, be my guest.

Tue, 11/09/2010 - 21:24 | 714534 traderjoe
traderjoe's picture

You lost me there a bit B9K9. I don't see how we can default on a portion of T's, cut the budget by 75%, and still maintain the reserve status. I'm not sure that the reserve status in of itself is the necessary part - it's the ability to pay for our overseas military expenditures (which could happen in another script) and the strength of the US consumer (and the attractiveness of the market) that make the biggest difference. The fact alone that more multi-nationals want access to the Chinese consumer market significantly diminishes the strategic importance of the US. 

I also don't think the price of gold is all that relevant to the strategic picture. Not enough people own gold for them to care whether it goes to $5,000 or even $50,000 an ounce. Of course, they could always outlaw its use in commerce if they cared all that much. 

But if we did a selective default and decimated our economy just to maintain reserve status, I don't think that would accomplish the objective. Our consumer-orientated market would be in such shambles (millions of Fed workers on unemployment) that companies would be fleeing to Asia in droves. 

I personally think 'they' have painted themselves into a corner. More printing just furthers our decline in the eyes of the world. Austerity will decrease the attractiveness of our market, and won't be all that successful in reducing our deficit (running at 70% of revenues). I would be willing to bet that a part of QE2 was that many CB's around the world said they didn't want to buy our T's anymore...

Tue, 11/09/2010 - 23:53 | 714865 jdrose1985
jdrose1985's picture

Deflation, bitches.

I would like to know B9K9's stance on oil: namely the declining availability of oil at a price conducive to the continuation of business as usual.


Wed, 11/10/2010 - 00:15 | 714903 trav7777
trav7777's picture

we can and will devalue while maintaining reserve status...I mean, shit, we have been for 40 years

Tue, 11/09/2010 - 20:44 | 714415 Fraud-Esq
Fraud-Esq's picture

How can .gov sue anyone for fraudulent accounting practices when .gov adopted those practices in '08. This is after the prior fraudulent adoptions in '81 which were purged somewhat in the 90's. Obama is doing what Reagan did in the 80's, papering it over and shifting INCREASED risk to the next guy.   

Tue, 11/09/2010 - 20:40 | 714401 Fraud-Esq
Fraud-Esq's picture

Good stuff.

The market is rigged by exchanges and their clients. The silence of .gov is alarming. The silence of the DOJ/SEC looks conspiratorial, actively or passively.  


Wed, 11/10/2010 - 07:28 | 715773 Cognitive Dissonance
Cognitive Dissonance's picture

It is becoming increasingly obvious that the veil is being lifted from the government sanctioned fraud simply because it has grown to the point where it crowds out "normal" business. And it's called fraud only because we were and still are told the system works one way only to find it works the opposite. This is fraudulent inducement.

Please remember folks that one of the precedents set by the Bush admin (yes, we could go back much further and it doesn't matter which political party we're talking about here) was that if the President does "it" during a time of war, it ain't illegal. This is just one of the reasons for the constant state of war AND to the yearly declarations by the sitting President that there still exists a state of emergency.

Continuity of Government, essentially a form of martial law, was enacted on 09/11/2001 and as far as I can see, was never rescinded. This means we don't know exactly what is considered legal and acceptable if done under the cover of "national security". Thus we must assume everything is. This fact alone goes a long way to explaining the insanity we live within. Please see my latest article for the lengthy explanation.

Wed, 11/10/2010 - 12:15 | 716522 Marla And Me
Marla And Me's picture

Here is the continuation of the state of emergency for 2009:

and here it is for 2010:

Just in case you need proof from the white house itself.  We have been, and continue to be, in a state of constant "national emergency" which alters the powers of the executive branch.  It's the legal way to be draconian...

Tue, 11/09/2010 - 20:52 | 714436 sax
sax's picture

This is absolutely fantastic!


Nice work guys, excellent report.  Glad some people are taking the time to point out such an important issue...and this is coming from a guy in Australia who doesn't really need to care

Tue, 11/09/2010 - 21:16 | 714511 damage
damage's picture

This would have been better if it was a video, with music in the background... like maybe the end of the 1812 overture...

Wed, 11/10/2010 - 15:42 | 715029 fuu
fuu's picture


I decided to avoid the audio copyright issues with an audioless version.

Of course I will take it down upon request.


Tubedub with the Overture.

Tue, 11/09/2010 - 21:43 | 714585 turds in the pu...
turds in the punchbowl's picture

bummer about the strict file permissions – these charts are begging for a montage

a muthafuckin montage.

Tue, 11/09/2010 - 21:48 | 714603 Fidel Sarcastro
Fidel Sarcastro's picture

Great stuff Tyler...I'll be spreading the word this very evening.

I haven't looked at every mini-flash crash event presented above but after looking at many it seems as if the richly priced stocks are suffering 1% insta-crashes, while lowlier stocks are pasted 5% in milliseconds.  Some, however, were 20% or more.  

It looks as if the algorithms themselves have been programmed to hammer these stocks to a specific percent of the share value.  Just a thought. 

Tue, 11/09/2010 - 21:49 | 714609 bigelkhorn
bigelkhorn's picture

Go watch this video, it is brilliant and explains things in about 1 minute.

God help us all!!

Wed, 11/10/2010 - 00:19 | 714911 jdrose1985
jdrose1985's picture


I just wasted a minute of my life, please go back to Yahoo boards.

Thanks in advance

Tue, 11/09/2010 - 22:14 | 714688 DocLogo
DocLogo's picture

great job, TD.

Tue, 11/09/2010 - 22:32 | 714721 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Brilliant work.  Simply astounding findings.  Thank you.

Tue, 11/09/2010 - 22:45 | 714750 Sun Tsu
Sun Tsu's picture

Identify a weak trend, then enter incremental limit buy orders@t -z% to -10z% in a binary "search" progression until the ALG triggers

Tue, 11/09/2010 - 22:46 | 714753 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

ZH has been good at pointing out these little...hmmm....anomalies. There is an easy way to fix this f*cking mess. Unplug the supercomputers and bring back the pits like old days. My guess is this is too easy of a solution, thus, it will not be done.

Tue, 11/09/2010 - 23:16 | 714796 agrotera
agrotera's picture
you cant massively scam people with fractions....when we converted to the decimal system, this could have been foreshadowed...and same for the revocation of Glass Stegall--you can't utilize depositors money to leverage bets to get bailed out by the taxpayers and those depositors if Glass Stegall is in place.
Tue, 11/09/2010 - 23:58 | 714874 Atomizer
Atomizer's picture

Pretty self explanatory.

During the decade, the division also pursued serious color of law and civil rights violations, as well as organized crime groups. In 1991, a joint FBI/IRS investigation led to the indictment of several active and retired Detroit police officials on charges of embezzlement, obstruction of justice, and income tax violations. The next year, FBI Detroit investigated a serious arson case that targeted an African-American resident of Battle Creek, Michigan. And in 1996, the division’s five-year undercover investigation called GAMTAX culminated in the indictment of 17 members of the Detroit mob—nearly its entire hierarchy—on charges of illegal gambling, loan-sharking, extortion, and acts of violence in support of those crimes. By 1998, Detroit boss Jack Tocco and several of his most important assistants had been convicted.

Following the events of 9/11, the Detroit Division shifted its focus to countering terrorist threats and strengthening its intelligence capacities. Working closely with the local Muslim communities, it has worked to identify extremist threats and to prevent retaliatory hate crimes against Michigan residents.

With a century of service under its belt, the Detroit Division is committed to using its full range of skills to protect and defend the citizens, businesses, and communities of Michigan in the years ahead.

Wed, 11/10/2010 - 00:11 | 714897 thesnark
thesnark's picture

Can someone please help me understand these charts better?

Are we looking at NBBO? Which side? both? I assume that the colored circles denote bid/ask size, is this correct?



Wed, 11/10/2010 - 00:40 | 714942 Jadr
Jadr's picture


I'm pretty curious as well as to how to correctly interpret the different colored circles and squares on the charts.

Wed, 11/10/2010 - 00:17 | 714907 trav7777
trav7777's picture

WTF is the point of this big assed analysis?


Wed, 11/10/2010 - 00:26 | 714926 lizzy36
lizzy36's picture

Because it is relevant, and funny as hell:

WASHINGTON (Dow Jones)--The circuit-breakers put in place after the flash crash to prevent price swings in stocks have been effective, but could still use some tweaks, Securities and Exchange Commission Chairman Mary Schapiro said Tuesday.

Schapiro discussed the SEC's response to the May 6 flash crash late Tuesday in a speech at Northwestern University's School of Law.

After the crash, the SEC put in place stock-by-stock and market-wide circuit breakers that halt trading for five minutes if a stock plunges by more than 10% in five minutes.

"The circuit breakers have been triggered 15 times since being put in place. And while we are likely to modify them based on our experience, we believe they have worked well to protect investors who rely on the financial markets price discovery function and to limit the effect of erroneous quotes," Schapiro said in prepared remarks

Wed, 11/10/2010 - 02:07 | 715040 Glass Steagall
Glass Steagall's picture

"..they have worked well to protect investors who rely on the financial markets price discovery function.."


"..and to limit the effect of erroneous quotes."

Wed, 11/10/2010 - 00:55 | 714938 Fraud-Esq
Fraud-Esq's picture

Tyler Durden....

This is how the entire backdating options lawsuits started, someone simply decided to do the math. The most amazing thing about the backdating lawsuits is they were born in one man's simple "WTF is going on here analysis". 

The next step is WHO, how and how do you identify the tort victims?? 

Wed, 11/10/2010 - 02:00 | 715033 fuu
fuu's picture

Pretty sure the fall of Enron started with one person doing the math and asking, "Wtf is going on here?".

Wed, 11/10/2010 - 02:27 | 715056 Fraud-Esq
Fraud-Esq's picture

right! Problem is... someone has to be damaged and sue. In Enron, no one could sue besides .gov until it was too late. With backdating and flash crash, you can pinpoint the "damaged" as a shareholder in a date range or in Tyler's case, a specific moment. perhaps someone who sold due to price manipulation? That's a tough one, could be the perfect tort. The damaged would have had to make the decision to sell, whether pre-programmed, limit or whatever the case. So, they would have to argue that someone defrauded them to create that price-point and it didn't reflect "the true market" at that time. (bring in the competing experts). So, is that action illegal? Is it civil fraud? MM's do it everyday on the dark markets. It's as if our major markets are behaving like the OTCBB, but not because of MM's but outside pirates. I don't know enough about the particulars, but it sounds interesting to me. Arbitration clauses wouldn't cover suits against third parties. If I knew one person who lost money in these flash crashes, I could have fun with it.



Wed, 11/10/2010 - 01:09 | 714978 tony bonn
tony bonn's picture

oh how i love the smell of horse shit, dead fish, rotten eggs, and decomposing corpses in the morning. and the establishment butt lickers will deny the phenomenon just like they did the missle fired last can count on the establishment liars to keep lying till their teeth rot.

Wed, 11/10/2010 - 02:58 | 715086 beanieville
beanieville's picture

I think flash crashes were due to too many scared traders, who read a lot of ZeroHedge doom-on-you articles.

Wed, 11/10/2010 - 07:41 | 715784 bania
bania's picture

Would it be possible for a few firms to engineer a massive flash crash (i.e. 10x the size of May 6th), taking the Dow down to 2,000 (just picking a number) in an extremely short period of time so when the stop losses kick in the stock price is 50%-90% below the stop loss level and therefore wiping out individual investors and mutual funds.  The buyers at the bottom of course would be the firms engineering the wipe out.

Is such a scenario (i.e. the largest bank robbery in the history of the planet) plausible or are there mechanisms in place to prevent this from happening?  Can anyone with professional trading experience comment on this?

Wed, 11/10/2010 - 09:23 | 715858 Cognitive Dissonance
Cognitive Dissonance's picture

In my opinion anything is possible when liquidity is withdrawn all at once. Though I suspect the markets would be closed as quickly as possible.

I think the more important issue here is, would there be prosecutions? The answer is NO because it all falls under the "national security" banner.

Wed, 11/10/2010 - 09:25 | 715868 scratch_and_sniff
scratch_and_sniff's picture

All it would take is for a small handful of HFT firms in cahoots, and they could easily shut the entire market down for the day. Its possible, but you have to ask yourself, why would they do it? Most of these crashes above probably arose from a misunderstanding about the market the programs were deployed in, i am sure when the programmers seen what their algo's did they probably shit themselves. But the thing is, there should be real concern when it happens this often, because one day the programmers will stop shitting themselves and start saying, hummmmm. It's at this point the SEC will either need to ban HFT altogether or employ another few thousand staff.

Wed, 11/10/2010 - 09:19 | 715853 johngaltfla
johngaltfla's picture

Thanks TD and company. I've downloaded this and now it's time to track the performance of the stocks in question heading into year end. I'm wondering if the pump with garbage scenario will fizzle soon and we'll roll over severely if nothing is done with capital gains tax reform.

Wed, 11/10/2010 - 10:03 | 715935 rcaldwell00
rcaldwell00's picture

Tyler, great advertisement, Eric nice work brother.... 

Fri, 11/12/2010 - 01:42 | 721395 gnap
gnap's picture

I noticed that the FINANCIALS chart shows 2 flashes on November 9th.

Around 10:30am it flashed down 20% and around 3pm it flashed down close to 15%.

I have not studied the FINANCIALS charts to know if these blips or common or not.  Any thoughts?

Mon, 11/15/2010 - 14:30 | 727971 privet
privet's picture

This is great.  However, I think it might be better if the average daily volume of each stock was posted on each page, and possibly better still if the list was sorted by volume.  It seems to me that flashes in very small volume stocks could be caused simply by, say, someone dumping a few hundred shares at market.  Flashes in high volume stocks on the other hand, especially in the absense of news as you define them here (2nd suggestion : make this clear in your presentation), suggest, to me at least, a system instability.


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