The Flash Crash caused U.S. markets to plunge and recover within minutes on May 6, 2010.
During the afternoon, the Dow Jones Industrial Average suddenly fell about 1,000 points, or roughly 9%, before recovering much of the loss. Some individual securities briefly traded at extreme prices, while liquidity disappeared from parts of the market.
Investigations connected the event to automated and high-frequency trading interacting with a large sell order in already nervous markets. The exact chain involved complex electronic order systems, rapidly changing prices, and traders withdrawing or adjusting quotes. Regulators later charged a British trader, Navinder Singh Sarao, whose activity was linked to part of the episode.
The Flash Crash differed from a conventional bear market because its most dramatic movement happened within minutes and was partly reversed the same day. The event prompted changes to market structure, including circuit breakers and rules for handling clearly erroneous trades.