<i>Then the exchange breaks the 0.5x trade</i><p>Yeah, this can&#x27;t be overemphasized. When some widow or orphan (or more likely GS) is on the other side of the trade, then clearly it should be broken. Wouldn&#x27;t want them to lose any money. &#x2F;sarcasm<p>As you say, the rational action is not to play.<p>Other people have opined on this and said that, if the &quot;clearly erroneous&quot; rules are properly defined, then a trade should <i>never</i> <i>never</i> <i>never</i> be broken. It should simply not be allowed to go thru. That makes more sense to me.<p>Edit: And for those who think this is merely hypothetical, or just whinging, you should read this: <a href="http:&#x2F;&#x2F;www.ft.com&#x2F;cms&#x2F;s&#x2F;0&#x2F;37fff9c6-0b36-11e3-bffc-00144feabdc0.html" rel="nofollow">http:&#x2F;&#x2F;www.ft.com&#x2F;cms&#x2F;s&#x2F;0&#x2F;37fff9c6-0b36-11e3-bffc-00144feabd...</a>
GS trades were broken. Hopefully the FT paywall won&#x27;t block that link, it worked for me when I searched for the story. So who knows.