Flash Crash: A Trading Savant, a Global Manhunt and the Most Mysterious Market Crash in History

by Liam Vaughan

‘spoofing’, whereby a trader places a bunch of buy or sell orders, enticing other participants to follow suit, then cancels them before they are executed, with the goal of nudging the market higher or lower.

Mihaly Csikszentmihalyi from the University of Chicago coined the term ‘flow’ for the kind of transcendental experience that takes hold when an individual is completely immersed in a task.

‘One day, years from now, a trading desk will typically consist of three things. A man, a dog and a computer. The computer’s job will be to trade. The man’s job will be to feed the dog. The dog’s job will be to bite the man if he goes anywhere near the computer.’

‘Traders think of trading as a game. Many traders have a gaming background: poker, backgammon, computer games. You make moves. I’ll bluff and I’ll try and maneuver around to get my strategy implemented.

In international law there is something called the ‘Doctrine of Specialty’ that states that an individual can be tried only for the offences for which they were extradited. Since the prosecutors couldn’t add charges at a later date, only subtract them, it was in their interests to cast the net wide.

Swiss secrecy laws are among the strongest in the world and, for the very wealthy, owning your own lender can be more efficient than parking your money elsewhere, which explains why there are around four hundred bank branches in a city of four hundred thousand people.

‘Businesses that need money often don’t look hard enough at potential partners, a mistake that can be expensive and damage their reputation,’ Malcher wrote in his piece. ‘Not enough executives stop and ask who it is that’s making an offer and what their background is.’