Reuters’ Herbert Lash and Jonathan Spicer has found a document that reveals the mystery trade that triggered the market crash last Thursday.
The culprit is Waddell & Reed, a money managing firm.
Waddell sold on May 6 a large order of e-mini contracts during a 20-minute span in which U.S. equity markets plunged, briefly wiping out nearly $1 trillion in market capital, an internal document from CME Group Inc said.
The firm sold 75,000 e-mini contracts at once on Thursday, which CFTC chair Gary Gensler said made up 9 per cent of the volume in e-minis during the sell-off in the U.S. markets.
Sadly we still don’t know who the one trader who made the mistake is, but knowing the firm definitely narrows it down.
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