And the answer? Well "lots of things." So says the Wall Street Journal via NPR.
Stock Market's Nosedive Wasn't Set Off By A Trader's Typo, 'Journal' Says - The Two-Way - Breaking News, Analysis Blog : NPR:
"Knocking down one of the more popular theories about the brief, nearly 1,000-point plunge by the Dow Jones Industrial Average on Thursday (the theory being that some trader typed 'billions' when he or she meant 'millions'), the Journal says that:I doubt very much this is the last word on this. Stay Tuned.
'Instead, the picture is one of a highly rare confluence of events, some linked, some unrelated, that exposed weaknesses in the stock market large and small.'
And it all may have been triggered, the newspaper says, by a relatively common order from a firm called Universa Investments LP, which placed a $7.5 million trade for 50,000 options contracts that would pay off big if the market declined in coming months. That spurred other firms to place bets of their own, and a series of financial dominoes started to fall.