What Lies Behind A Flash Crash: Gold 2

Gold flash crash august 2021

Consider this example, which also offers a hypothetical, possible, sequence of events that happened in gold over the weekend. A trader holds a substantial position in Asian high yield corporate debt, which is not a very liquid market. The position gets marked down by a significant amount overnight, for whatever reason (the reason  doesn’t really matter in this example), and the trader has to meet a margin call.

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