The May 6 Flash Crash: Risks of Algorithmic Trading | 5min snip from We Study Billionaires

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TIP280: A History of 5 US Market Crashes w/ Scott Nations (Business Podcast)

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CHAPTER

The May 6 Flash Crash: Risks of Algorithmic Trading

This chapter explores the events of the May 6, 2010 flash crash, highlighting the impact of an institutional investor's electronic selling on market stability. It discusses the intricacies of algorithmic trading and the risks involved when market liquidity is overestimated.

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On today's show, we talk to financial history expert, Scott Nations, about the United States's five most impactful crashes.

IN THIS EPISODE, YOU'LL LEARN:

An in-depth analysis of the stock market crashes in 1907, 1929, 1987, 2008, and 2010.
The similarities between the FED’s monetary policy in 1929 and today.
How the stock market could decline by 22.6% in a single day in 1987.
How the incentives for homeowners and investment bankers in 2008 destroyed the stock market.
Why the next crash is going to look more like the flash crash in 2010 than any of the earlier crashes.
Ask The Investors: How should I invest in sector ETFs?

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Subscribe to Real Estate Investing by The Investor’s Podcast.
Listen to the first episode of Real Estate Investing by The Investor’s Podcast, with Chad Carson .
Scott Nation’s book, A History of The United States in Five Crashes – Read reviews of his book.
Scott Nation’s Amazon author page.
Scott Nation’s website.

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