The phrase flash crash refers to an incident in the electronic securities markets in which stock withdrawal orders immediately exacerbate price falls before rebounding quickly. A flash collapse seems to be a quick sell-off of assets that can occur in a matter of minutes, resulting in severe reductions. However, by the end of the day, prices are as if the flash crash never happened.

A flash crash is a sudden, sharp drop in the price of an asset or market, often followed by a quick recovery. These events usually occur within minutes or even seconds, driven by factors like high-frequency trading algorithms, low liquidity, and market imbalances. During a flash crash, prices can plummet dramatically, causing panic among traders and investors. However, the market often rebounds quickly as normal trading resumes. Flash crashes can be triggered by technical glitches, errors, or extreme market conditions. They expose the vulnerabilities of modern financial systems, where automated trading plays a significant role, and highlight the need for better safeguards to prevent such incidents from causing broader market disruptions.