You have to love the way these electronic futures (e-Mini S&P's - 50x leveraged) are geared. One trader's 4.1bln stone in the pond triggers a chain of ripples that causes $900+bln losses. Its gotten so extreme that "The current average daily implied volume for the E-mini is over $140 billion, far exceeding the combined traded dollar volume of the underlying 500 stocks." - wikipedia<p>That said I don't think the problem lies in leverage. I'm sure if this Waddell & Reed trader had tried to pull a fast one in the trading pits where they trade the 'big boy' S&P futures (500x leveraged), the effect would have been much more muted because fellow traders would have pinpointed the seller and reacted accordingly. When the trades are coming in electronically, the 'enemy is faceless'...<p>For some related fun listen to the squawk in the pits:<p><a href="http://catastrophist.wordpress.com/2010/05/09/ben-lichtenstein-sp500-pit-squawk-may-6/" rel="nofollow">http://catastrophist.wordpress.com/2010/05/09/ben-lichtenste...</a><p>(The excitement/fear is palpable - bear in mind Ben is a professional watching billions wasting away)