After the Flash Crash, Stocks Still Moving

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Traders work on the floor of the New York Stock Exchange before the closing bell May 6, 2010. The Dow plunged almost 1,000 points before closing down 347 on Greek debt fears.

Today is the third anniversary of the 2010 Flash Crash but, in addition to that that historic free fall, there are smaller flash moves almost every day in the stock market that analysts argue erode the confidence of investors.

Eric Hunsader of Nanex provided CNBC with three examples of recent flash moves.

In order to identify a 'flash move', Hunsader used three different parameters: 1) the drop or pop in the stock occurred in under one second; 2) it involved a number of trades, not just one bad tick; and 3) the stock moved several standard deviations implying a dramatic swing in its price.

Three examples Hunsader highlighted all took place this spring: Google's drop on April 22, when the stock opened at $803 and then, at around 9:37 am ET, nose-dived some 3.6 percent only to then immediately shoot higher.

Two others: Aon, on February 26, at 9:35 am ET, suddenly dropped 2 percent while Equity One on March 14, at 3:55 pm ET, tumbled 4.3 percent in under one minute.

Retail investors might avoid equity markets because, in part, they have lost faith in the integrity of modern market structure, Hunsader said. Such flash moves don't do anything to improve that, he says.

High frequency traders don't dispute the occurrence of such mini flash moves, but they do disagree on the cause. Sean Hendelman of T3 Trading Group says such cliff dives can be caused by a lack of liquidity rather than a rapid fire computer.

More to the point, says Hendelman, general investors are not necessarily harmed by such moves split-second moves. The market, the trader says, is efficient and a stock is ultimately priced according to supply and demand.