Available at SSRN: Andersen, Torben G. and Bondarenko, Oleg, Assessing VPIN Measurement of Order Flow Toxicity via Perfect Trade Classification (May 10, 2013). 34-50870; File No. Navinder Singh Sarao, the British trader blamed for helping cause the 2010 Flash Crash from his bedroom, should serve no additional jail time, US authorities said in a recommendation before his . A gifted mathematician with a photographic memory and a passion for gaming, Sarao mastered a frenetic form of trading known as 'scalping,' going on to earn . Navinder Sarao didn't . Most prominent of all, the CME issued within 24 hours a rare press release in which it argued against the SEC/CFTC explanation:[49]. Leinweber wrote:[50]. cookies [72], Sarao pleaded guilty to one count of electronic fraud and one count of spoofing. The self-taught UK trader who made millions in bogus trades and contributed to a brief 2010 crash in the US stock market has been sentenced to a year of home . Instead of greed, the trader seems to have been motivated by viewing trading through the prism of his autism, which was described as both a disability and a talent. The stocks of eight major companies in the S&P 500 fell to one cent per share for a short time, including Accenture, CenterPoint Energy and Exelon; while other stocks, including Sotheby's, Apple Inc. and Hewlett-Packard, increased in value to over $100,000 in price. The 37-year-old British stock market trader of . Updated: April 23, 2015 6:31 pm IST. ", "Trades Dumped on Exchanges Blamed for Intensifying May 6 Crash", http://investor.cmegroup.com/investor-relations/releasedetail.cfm?ReleaseID=513388, http://www.nanex.net/FlashCrashFinal/FlashCrashAnalysis_WR_Update.html, "Spontaneous recovery in dynamical networks", http://www.nature.com/nphys/journal/v10/n1/extref/nphys2819-s1.pdf, "Navinder Singh Sarao: The 'flash crash' trader who fell foul of Washington", "Autistic futures trader who triggered crash spared prison", "The trader blamed for the 'flash crash' tried to blow the whistle on other traders", "UK speed trader arrested over role in 2010 'flash crash', "Futures Trader Charged with Illegally Manipulating Stock Market, Contributing to the May 2010 Market 'Flash Crash', "British Trader Charged in 'Flash Crash' Released After Bail Reduction", "Documents show flash crash trader's frenetic business dealings", "Navinder Singh Sarao: reclusive trader or criminal mastermind? Text. Mr Sarao saw his trades as a way to "fight fire with fire", Mr Burlingame added. They show that breakdowns in market quality (such as flash crashes) have occurred in every year they examined and that, apart from the financial crisis, such problems have declined since the introduction of Reg NMS. "I hope that this is a lesson to you," she reportedly said. As they withdraw, liquidity disappears, which increases even more the concentration of toxic flow in the overall volume, which triggers a feedback mechanism that forces even more market makers out. Sarao was more concerned with the rise of high-frequency trading, a method of buying and selling that used powerful computers and algorithms to execute trades in fractions of seconds.