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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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.

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...

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.

Bill Lumbergh's picture

Thank you for a little humor tonight.

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.

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?


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."

Bill Lumbergh's picture

Save your energy and attack someone else brother.

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.

Bill Lumbergh's picture

Whatever man...could have fooled me.

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.

doomandbloom's picture

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

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?

Rahm's picture

Rigged, female dogsss!!

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.

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.

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.

sarnuk's picture



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

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.

-1Delta's picture

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

threefingerscam's picture

Reverse split.

For a laugh http://latestbusiness-news.com/in-focus-financial-sectors-bulls-vxx-nct-... (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.

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?

Augustus's picture

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

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.



lizzy36's picture

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

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?

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.

lizzy36's picture

Thank you.

You do good work.

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.

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.

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. 

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.

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...

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.


trav7777's picture

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

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.   

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.  


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.


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...

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

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...

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. http://tubedubber.com/#v6bBV4H-1lA:k-vQKZFF-9s:0:100:0:0:true

turds in the punchbowl's picture

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

a muthafuckin montage.

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. 

bigelkhorn's picture

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


God help us all!!

jdrose1985's picture


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

Thanks in advance

DocLogo's picture

great job, TD.

Mr Lennon Hendrix's picture

Brilliant work.  Simply astounding findings.  Thank you.

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