For the traders, problems emerged in early 2012 when losses mounted on their so-called credit derivatives bet, which allowed them to wager on the perceived health of companies like American Airlines.
Throughout these processes, traders faced the problem of keeping the ice from melting; melted ice represented waste and lost profits.
Under normal conditions, if an exchange has problems, traders can direct their orders to other public exchanges.
In one instance a trader would regularly shout out to colleagues that he was trying to manipulate the rate to a particular level, to check whether they had any conflicting requests.The FSA has identified price-rigging dating back to 2005, yet some current and former traders say that problems go back much further than that.
As with the stockmarket wobbles caused by Dubai's debt problems, traders may have decided this was the right moment to close their books for the holidays.After all, one of the main motors of the rally has been near-zero interest rates in the rich economies.
"The pop, if any, that Facebook may provide, may be a temporary distraction for traders, but material problems will likely take precedence," Rob Kurzatkowski, an analyst at OptionsExpress, wrote on Thursday.
An unnamed trader told Reuters that the shutdown wasn't the only problem for traders Wednesday morning, and that, "It was a mess from the open".
Says a parallel trader who insists on anonymity: "The biggest problem for parallel traders is getting our hands on inventory".
Instead, they have "fat tails": extreme events occur quite frequently.The problem for traders is that it is much more complicated to create models for a world of fat tails than for a world of bell curves.
At the peak of the problem, Tehran traders reportedly skirmished with the police outside Iran's Central Bank, protesting its initial refusal to trade rials for dollars and other foreign currencies.
