What if a central securities depository outage halts settlement region-wide?
A multi-day CSD outage halts regional settlement and blocks collateral substitution at clearinghouses — a tail plumbing freeze that forces vol-target deleveraging as positions can't be moved or financed. Rhymes with the 2020 Euroclear/CREST outages and ASX's CHESS failures, which stranded trades but were operationally contained. Trade long vol; the risk-parity-delever channel is the right read — forced selling comes from inability to manage risk, not a fundamental credit shock.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the Tail risk horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A multi-day CSD outage halts securities settlement region-wide, stranding trades and preventing collateral substitution at clearinghouses. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.