What makes you think I confuse the two? I only stated what was mentioned in the law suit, that within 19 seconds price moved from 7 dollar something to 83. That is highly unlikely to have happened on its own given the market volatility and moves in the underlying that day. Hence the liquidation must have heavily impacted market prices of that option. By the way, both sides cannot back away as you suggested. The only way market prices behave is when bid and offers widen AROUND fair value. If you quoted me a market that was backed away then I would trade all day with you to capture risk free arbitrage profits. For example if fair value was at 5 and you quoted me a 10-20 market I would sell to you at 10 all day long.