Reuters, in an article citing a document from the Chicago Mercantile Exchange, reported that regulators and market officials were focusing on the sale of 75,000 contracts of the 500 e-mini future by Waddell & Reed during the time period in question.
The VIX, a measure of volatility in the Standard & Poor's stock market index, rose to its highest level in more than six months, and market participants reported unusually large sales in the S.& P. 500 e-mini future, the instrument that was one of the triggers of last May's flash crash, and big sales of some exchange-traded funds linked to Treasury bond yields, adding to the feverish atmosphere.
Last week, the New York Mercantile Exchange, introduced "mini" futures contracts on the commodities in hopes of attracting more individual investors.
The trades amounted to 9% of volume on the Standard & Poor's e-mini futures contract, which is the largest futures account tracking US stock prices.
Reflecting the bearish sentiment, S&P e-mini futures were down 0.4% in Asia after Wall Street marked steep losses on Friday.
Late last week, a mini futures contract on natural gas cost about $13,000, but could be bought on margin with a cash outlay of as little as $1,350.
And then something unexpected appears – a flutter in the price of E-mini futures contracts, an investment vehicle traded on the Chicago Mercantile Exchange and regarded as a bellwether of wider sentiment.
Gary Gensler, the chairman of the Commodity Futures Trading Commission, said at a Congressional hearing on Tuesday that during that crucial time period, the futures trader, whom he would not identify, accounted for about 9 percent of trading volume in the most actively traded stock-index derivative contract, known as the 500 e-mini futures contract.
