Flash Crash (May 2010)
On May 6, 2010, US stocks plunged roughly 1,000 points in minutes as market orders overwhelmed thin liquidity, with the Dow briefly dropping about 9% before recovering. The CFTC and SEC found that a large sell order executed too aggressively against insufficient buy-side liquidity triggered the cascade.
Exchanges added staggered circuit breakers and tightened execution rules.
US markets adopted limit-up/limit-down price bands that pause trading when prices move beyond set thresholds.
Shows how exchanges dial order execution mechanisms to balance execution speed against price stability. Saudi Arabia's move expands the range for market orders within a capped band - the same lever US regulators turned the other direction after 2010.
