What if major market makers stop quoting during a volatility spike?
If Citadel Securities and Jane Street pull quoting in a vol spike, bid-ask depth evaporates and slippage — not direction — is the risk: spreads gap, risk-parity de-levers, credit widens. This rhymes with the May-2010 Flash Crash, when market-makers withdrew and liquidity vanished for minutes before snapping back. Skeptical take: regulatory and reputational pressure makes a full simultaneous withdrawal unlikely; the realistic trade is owning gamma into thin tape, since the dislocation is transient and liquidity returns once vol stabilizes.
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 0–6 months 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. Citadel Securities and Jane Street pull quoting during a vol spike, evaporating bid-ask depth across single-stock markets. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Financial conditions ▲ — which propagate through our causal graph to the markets below.