Like the Flash Crash of May 6, 2010, the Knight Capital glitch had an effect on the ETF market.
The Flash Crash started in the E-mini S&P 500 futures market and resulted in a "systemic problem with market-wide mispricings" says Paul Weisbruch, vice president of ETF/Options Sales and Trading at Street One Financial.
A trade was executed to sell 75,000 E-minis in just 20 minutes, which led to selloffs in the ETF market as well. Mispricings in the ETF market became so extreme -- trading almost 60% from previous prices -- that ETFs accounted for 70% of cancelled trades during the Flash Crash, according to the CFTC- SEC report on the flash crash.Giovanni Cespa and Thierry Foucault offer one explanation to the ETF price deviations in 2010 in their paper
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