Apple trading halted, resumes

A circuit breaker kicked in after high-frequency trades from BATS triggered a flash crash

The hearts of Apple (aapl) traders stopped briefly at 10:57 a.m. Friday when the company's share price, which had opened the day at $600.49 suddenly plummeted 9.4% to $542.80.

The rapid fall triggered a circuit breaker and trading was halted for five minutes. When it resumed, Apple was down $3 to $597.58.

The source was quickly traced to a flurry of high-frequency trades issued by BATS Global Markets, one of the largest high-frequency computer-driven trading platforms. BATS operates two exchanges which together account for 10% to 12% of all U.S. equity trading on a daily basis.

Most observers wrote the incident off as an error -- a so-called "fat finger" trade caused by someone hitting the wrong key.

But there have been a rash of such trading anomalies lately, and they can wreak havoc on a stock as volatile as Apple.

As it happens, the
Wall Street Journal
reported earlier in the day that the Securities Exchange Commission was investigating the high-frequency exchanges -- including BATS -- as part of a broader probe into whether the new trading platforms are using their high-speed links to the major stock exchanges to gain an unfair advantage.

"As part of this effort," the Journal reported, "the SEC is looking at communications between exchanges and high-frequency trading firms. Investigators are examining whether firms collude to limit competition or manipulate markets, according to a person familiar with the matter."

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions