The financial world and the economy can sometimes seem like a roller coaster, it has its ups and downs. There have been many historical incidents where economic crises and unrest have been recorded. These incidents can significantly disrupt the economy or simply appear as a minor fluctuation. In 2010, a somewhat more recent economic disruption, the flash crash occurred. The flash crash was a period in which stocks fell rapidly, but they also recovered, fortunately. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay This incident occurred on May 6 at approximately 2:30 p.m. Eastern Standard Time. The flash crash was one of the largest single-day declines in the history of the Dow Jones Industrial Average. The primary market makers that were on the exchange had automatically stopped taking the other side of everyone's trades, making the market illiquid. Sell ​​orders were not immediately bid for a few minutes. Initial reports indicated that the crash was the result of a mistyped order that turned out to be incorrect, but the causes of the flash crash remain unknown, although the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC ) had investigated the situation. The Dow Jones Industrial Average was already down 4% and continued to fall 6% in such a short period of time. Literally minutes. Although it was able to recover quickly, the index closed down around 350 points. The prices of about 8,000 stocks and exchange-traded funds fell following a rally. Most stocks fell about 15% before recovering later in the day. This not only affected the US markets, but also the European markets. These European markets began to follow suit as the markets of the United Kingdom, France and Germany fell. A bit of history before this event happened is that stocks were monitored by “specialists” who worked on the trading floors of the stock exchanges. These specialists were responsible for monitoring the market and ensuring that it was in good condition. This would temporarily pull other sides of the market when unmatched buy or sell orders arrive. The government did not particularly like these specialists. They were constantly accused of misleading investors. Policymakers have tried to do everything they can to replace these specialists with computers. This resulted in much of the market's liquidity coming from high-frequency trading computers. These computers were capable of carrying out transactions at the speed of light. In order to make money, they made a large volume of trades at small prices and they did it often. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) had published a report on this incident. and the report had given some theories and hypotheses as to why the flash crash might have occurred, but these hypotheses had failed to identify a specific reason for what caused the incident. During the crash, the SEC had canceled approximately 21,000 trades due to the fact that they were traded at very low and unexpected prices. On June 10, the SEC voted to establish new rules that would automatically stop trading in any S&P 500 stock whose price changed more than 10 percent in five minutes. It is believed that the reason for the system failure was due to. 2015.