After a relatively placid afternoon of oscillating in the $19.70-$19.90 range, the #1 trading vehicle for gold producers, the Market Vectors Gold Miners ETF (ARCA:GDX), experienced a ‘flash crash’ during the final minute of yesterday’s trading session:
5 million shares traded during the final minute of yesterday’s session which included 1.25 million shares during a 2-second burst which saw price fall as low as $17.72!!
This ‘flash crash’ was clearly a GDX specific event because none of the major components of this exchange traded fund (Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG), Newmont Mining (NYSE:NEM), etc.) experienced anything even close to the volume and price action in GDX. In after hours trading GDX has already recovered almost all of its flash crash losses:
Whoever executed the 1.25 million share order in the 2-second burst cost themselves roughly $800,000 by my calculations. While these ‘flash crashes’ have become rather commonplace in the current market environment, the fact that it occurred during the final minute of trading makes it a bit more unusual. It will be interesting to see if any additional information comes out regarding this odd trade.