Flash Crash

An extremely rapid and deep market decline followed by a swift recovery, typically lasting minutes. The most infamous flash crash occurred on May 6, 2010, when the Dow Jones plunged nearly 1,000 points in minutes before recovering most of the drop. Blamed on a combination of algorithmic trading, spoofing by a London-based trader, and thin liquidity, the event led to new circuit breaker rules designed to halt trading during extreme volatility.