Nasdaq Freeze

An anonymous correspondent explained final week's Nasdaq freeze thus.

The truth nigh what happened Aug 22 to the Nasdaq is that novel limit-up/limit-down rules took effect inward derivatives (exchange-traded products) listed at Arca at the same fourth dimension that novel options began trading marketwide that day. Since the marketplace lay is amount of complex, multi-leg trades, bad information propagated, affecting Goldman’s options-trading algorithms Tuesday, spawning hundreds of derivatives trading halts past times VIX expirations Wednesday, too producing bad information inward the consolidated record past times Thur, halting Nasdaq trading. So the existent culprit was the SEC. But it’s bad cast to say publicly that the regulator is responsible for jeopardizing the market.

I can't vouch for the story, or fifty-fifty for agreement it all. But I'm interested inward several emerging stories that around trading pathologies are inward business office unintended consequences of SEC regulation. It's also non the starting fourth dimension time I bespeak heed of fiscal marketplace lay participants afraid to verbalize out too earn the disfavor of their regulator.