Alexander Osipovich reports that a sharp move in stock-market futures that fueled the Dec. 7 buying in U.S. equities likely reflected trading by multiple buyers. MayStreet LLC, said its initial analysis was that the move was a single trade. The firm changed its view after being contacted by the Modern Markets Initiative, which carried out its own analysis of the event and concluded it was caused by multiple stop orders.
MMI Chief Executive Bill Harts said the “craziest” aspect of the event was that the apparent chain reaction of stop orders began with a small trade, the purchase of just one E-mini contract at 2,225, according to CME’s data. “That’s an eye-popping amount of trading in a very short time and occurred without any automated trading or HFT,” Mr. Harts said.