Jurgens Bauer, a cotton trader at the New York Board of Trade – a regulated subsidiary of the Intercontinental Exchange (ICE) – is reporting that cotton prices went limit down today, and that the ICE trading platform (which lists Nybot's contracts) went down with it.

“The only thing in the building that was going up today was the elevator. Even the escalator was broken on the second floor,” he wrote in an e-mail. More importantly, he writes that a serious flaw was exposed in ICE electronic trading platform: once cotton was offered at the limit, Web ICE shut down as a result.

“What happened was that trades on ICE continued to take place below limit. It was announced that any transactions that took place below limit would be nullified and canceled. This not only impacted out-right transactions, but also spreads in which one leg, or both, used inappropriate price levels. This created a nightmare for some, as they didn't know their position. But worst of all, following the announcement trades below the limit continued to occur.”

More as the story develops.