Flash Crash

A rapid market plunge and recovery within minutes, usually driven by algorithmic trading.

In depth

May 2010 US flash crash saw Dow drop 1,000+ points in minutes. Causes: high-frequency trading, liquidity withdrawal, cascading stop-losses. Regulatory response: circuit breakers, LULD bands, exchange controls.

Related terms

Circuit Breaker

Trading halt triggered when an index or stock moves beyond predefined thresholds.

Liquidity

How easily an asset can be bought or sold without affecting its price.

Volatility

The degree of variation in an asset's price over time.

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