Nasdaq · May 20, 2010
After Germany banned short selling
-4.11%
single-day change vs previous close
Part of a longer stretch
Two months of Greece and a flash crash
midway through · 2010-04-23 → 2010-07-02, -17.33% over the whole period
What happened that day?
- The Nasdaq fell 4.11% on the day
- Days earlier Germany had abruptly banned short selling in some financial shares and government-bond related trades, without consulting other countries
- The manner mattered more than the rule. Moving alone and in haste reads as seeing a danger others cannot
- Banning short selling looks like it should lift prices, but it usually does the opposite. With fewer ways to sell, buyers cannot hedge and so do not buy at all
- What weighed most was the sign that Europe could not coordinate. In a crisis the most important thing is saying the same thing
- This correction ended two months later, in early July
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.