October 19 clearing required twenty times a normal day’s cash transfers.

Evidence

Every evening, after a futures exchange such as the Merc closes, the process of clearing is undertaken. Those whose trading positions have lost money must transfer cash or collateral to the exchange’s clearinghouse for deposit into the accounts of those whose positions have gained. After a normal day on the Merc in the late 1980s, $120 million would change hands. On the evening of October 19, however, those who had bought S&P futures contracts owed those who had sold such contracts twenty times that amount (Melamed and Tamarkin 1996, p. 359). — Donald MacKenzie, An Engine, Not a Camera, 19

Categorization

• DEEPTHINKING: The clearing mechanics — losing positions transferring cash to winners on the day of the crash — make concrete how a futures crash becomes a liquidity crisis, a mechanism rarely grasped in abstraction.
• ADDENDUM: The clearing mechanism — the daily settlement pipeline that can seize up on a crash day — parallels the sacrifice/ritual-functionality angle: the institution’s mechanical functioning under stress is what stabilizes or fails.