So the SEC now confirms what everyone else figured very quickly on Thursday: there was no fat-finger error. Nobody tried selling 1.5 million S&P e-mini futures, but accidentally sold 1.5 billion or some such nonsense.
Just didn’t happen.
The hunt for a “glitch,” or merely a cause, however, has gotten so ridiculous that some are blaming a trade from Nassim Taleb’s fund, which is a delicious theory, but hardly a cause of the crash in any meaningful sense.
What happened Thursday doesn’t seem to be all that much of a mystery. There was a trading slowdown at the NYSE, and so when orders were re-routed to outside exchanges, largely electronic and dominated by high-frequency traders, the buyers stepped away.
This is a glitch, but it’s a regulatory glitch — the lack of unified market curbs — and it sounds as though there’s a reasonable chance that will get resolved in some way.
But the search for a technical answer is a lost cause. Time to give up.