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Regulators are examining trades made May 6 by an unidentified futures trader during the time frame when the U.S. stock market witnessed an abrupt plunge.
CFTC Chairman Gary Gensler said in his testimony before Congress on May 11 that there were about 250 participants in the E-Mini S&P futures contract during the sell-off. While the majority of the traders with the top 10 largest longs and shorts both purchased and sold during that period, one trader used the E-Mini contract to hedge and only entered orders to sell. The trader had a short futures position that represented on average 9% of the volume traded during that period. The trader sold on the way down and continued to do so even as the price level recovered.