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.

Transcript

chevron_right

Play full episode

chevron_right

Transcript

Episode notes

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.

NEW TO THE SHOW?

Check out our We Study Billionaires Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

River
Toyota
Range Rover
Fundrise
AT&T
The Bitcoin Way
USPS
American Express
Onramp
SimpleMining
Public
Vacasa
Shopify

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Learn more about your ad choices. Visit megaphone.fm/adchoices

Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app

Home Top podcasts Popular guests