The Power Of Nanosecond Trading

Red line represents the frequency of sub-650 millisecond flash crashes, and blue the frequency of flash spikes, between January 2006 and February 2011. The black spike is the S&P 500 index. Image: Johnson et al./arXiv

Nanosecond Trading Could Make Markets Go Haywire -- Wired

The afternoon of May 6, 2010 was among the strangest in economic history. Starting at 2:42 p.m. EDT, the Dow Jones stock index fell 600 points in just 6 minutes. Its nadir represented the deepest single-day decline in that market’s 114-year history. By 3:07 p.m., the index had rebounded. The “flash crash,” as it came to be known, was big, unexpected and scary — and a new study says flash events actually happen routinely, at speeds so fast they don’t register on regular market records, with potentially troubling consequences for market stability.

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My Comment: So much for the small individual investor.