[Photo:  Chicago Mercantile Exchange - Pininterest]

On December 7th at 1:21 p.m., an unknown trader purchased around 16,000 E-mini S&P 500 futures contracts valued at A $1.8 billion - the biggest transaction of its kind all year - and comparable in size to the “fat finger” trade said to have set off the May 2010 “flash crash.” The purchase was more than double the size of a big E-mini trade that took place on 1/15/16, in which someone sold about 7,000 contracts, or around $645 million.

The trade occurred after muted morning gains by the stock market, which then soared in the afternoon after the transaction, with the S&P 500 closing at a fresh record of 2,241.35 on Wednesday and then extending gains into Thursday and Friday.

Traders use e-mini contracts to bet on or hedge against future moves in the S&P 500 stock-market index, and large moves in the price of E-minis can have knock-on effects in the stock market.

Wednesday’s order sparked a frenzy of superfast trading as other market participants piled in and a total of $3.4 billion worth of E-minis changed hands within 2 seconds, including the original transaction. It’s unclear who stood behind the trade, and CME Group said it couldn’t comment on “the specifics of any particular order.”

It’s believed that a computer program unleashed the buying, perhaps on behalf of a bank that needed to automatically hedge a trade in stock-market derivatives, per Joshua Lukeman, an MD with Credit Suisse.

“It felt like the beginning part was electronic because it went through the pipe so quickly,” Mr. Lukeman said. Then there was a “snowball effect of other folks rushing in,” he added.

Heavy bursts of volume in E-minis aren’t unusual, but they tend to take place when the stock market closes, at 4 p.m. ET, not in the middle of the day.