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What Triggered Wednesday's Sell-Off?

As you might know, the S&P slipped to a 5-year low on Wednesday and oil prices tumbled below $67 a barrel to 16-month lows.

Behind all the selling are hedge fund redemptions, explains Dylan Ratigan.

In essence as investors pull their money out of hedge funds (for fear of falling stock prices) the hedge fund managers have to sell stocks in order to come up with cash.

And lately that’s created a vicious cycle because the more people sell stocks the more people want to pull their money out of hedge funds.

You can never know precisely who made the market sell-off but CNBC’s Steve Liesman has his ear to the ground. He’s hearing two parties could be behind the sell-off. He says, a “very large fund to funds (a fund invested in other hedge funds) was redeeming a large percentage of it’s totalnet worth." And Liesman is also hearing another quant fund blew up.

So much for today. At least there's still tomorrow.



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Trader disclosure: On Oct.22, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money trader; Macke Owns (SDS), (UUP), (MSFT), (BNI), (MCD); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS), (PM), (RAI), (DEO); Finerman's Firm Owns (MO), (MSFT); Finerman's Firm Is Short (BBT), (COF), (IYR), (IJR), (USO), (SPY), (IWM); Seymour Owns (AAPL), (BAC), (EEM), (F), (MER)