I was looking at the March 2009 European DJ STOXX 50 Futures (FSTX) chart. On February 26, 2009 (at 3:55 PM) on the 1 minute charts the contract was trading at 1764.
Then on the consecutive minute bar (which shows a date of February 27, 2009 (at 2:01 AM)) on the chart the price spiked to 2262 and 2250 in two consecutive minutes before returning to 1762 on the following minute.
This is a 500 point move in the matter of 1 - 2 minutes.
I have a couple questions:
1. What are potential causes of a spike like this?
2. What happens to everyone who was say short or long the contract at this time.
3. Did the shorts get stopped out or worse yet have a 500 point loss?
4. If a long sold their contract did they just pocket a 500 point profit.
5. How can a trader protect themselves against an event like this? If a hedge of some sort - if yes - for example?
Any feedback or thoughts regarding trading futures and experiencing spikes is greatly appreciated.
Thanks
Then on the consecutive minute bar (which shows a date of February 27, 2009 (at 2:01 AM)) on the chart the price spiked to 2262 and 2250 in two consecutive minutes before returning to 1762 on the following minute.
This is a 500 point move in the matter of 1 - 2 minutes.
I have a couple questions:
1. What are potential causes of a spike like this?
2. What happens to everyone who was say short or long the contract at this time.
3. Did the shorts get stopped out or worse yet have a 500 point loss?
4. If a long sold their contract did they just pocket a 500 point profit.
5. How can a trader protect themselves against an event like this? If a hedge of some sort - if yes - for example?
Any feedback or thoughts regarding trading futures and experiencing spikes is greatly appreciated.
Thanks