Yesterday’s market crash was the largest single day sell-off in major stock indices since December of 2008. While the face numbers were really ugly, a 512 point (4.1%) dip in the Dow (NYSE:DIA), and even steeper losses in the Nasdaq (NASDAQ:QQQ) and S&P 500 (NYSE:SPY), a look at some of the less publicized information related to the downturn offers some revealing details.
Don’t Miss: Why Did the Dow Crash 500 Points?
1) MarketWatch reports that Thursday’s panic triggered the Securities and Exchange Commission’s short-sale limits on 460 stocks. “The SEC’s short sale rule restricts the prices at which a stock can be sold short if the stock’s price drops 10% or more in one day. When the rule is invoked, traders are only allowed to sell the stock short at a price above the highest national bid to relieve rapid selling pressure.” In other words, things could have gotten much nastier looking.
2) The market volatility index (NYSE:VXX), known informally as the ‘fear gauge’ measuring uncertainty in the trading environment, spiked by more than 20% yesterday and hit a 52-week high earlier today. The popular measure has risen 25% in the past week, and 97% over the past month, in response to higher recent trading volumes. The VIX is designed to signal increased trading action, regardless of direction, but spikes in the index are commonly associated with downturns in the market.