But before some brokers had managed to throw themsleves out of the window, the prices began to recover. The direct causes of ‘The Flash Crash’ were not to be found in humans, but with computers.
The state commission of inquiry, appointed in response to the price collapse, concluded that the culprit was a major player, the algorithm-driven programs had acted with a share over 20 minutes. It was enough to trigger other algorithms in what became a chain of increasingly bizarre transactions, in which Accenture shares were sold for a penny, while Apple shares went for $ 100,000 each (although this could be cancelled).
In recent decades, financial markets are increasingly computerised. In the latest issue of Wired magazine Harold Bradley describes how he, as a manager at a medium-sized investment company in Kansas, devoted several years of the 1990s to creating the most effective computer programs for trading purposes.