High-Speed Trading Glitch Costs Investors Billions

One regulator said officials had identified “a huge, anomalous, unexplained surge in selling” as the source of the market rout.

High-Speed Trading Glitch Costs Investors Billions

An anomalous surge of trading in Chicago? Has anyone noticed how prominently Chicago figures in politics, economics and culture for the past year or so? How and why did the fulcrum of the world shift to Chicago?

"The answer — that it all started with an apparent error — infuriated Mr. Clancy. “The market was never down one thousand points,” he said. “Procter & Gamble should never have traded at $39. But a lot of people lost money as if the prices were meant to drop.”

For a short while, traders started to distrust what they were seeing.

“There was no pricing mechanism,” Mr. Clancy said. “There was nothing. No one knew what anything was worth. You didn’t know where to buy a stock or sell a stock.”"

High Frequency Trading is positive feedback. Positive feedback systems are unstable This was an instability.

Chicago is the home of the "Chicago Board of Trade" the home of futures trading and thus derivatives.