Thursday turned into a wild ride for derivatives traders on the Shanghai Futures Exchange, illustrating the trickiness of globalized derivatives markets and the need for robust risk management strategies. The trouble began with rumors about rubber futures and a Chinese brokerage.

As trading began, whispers were heard that Dadi Futures, a major brokerage in Zhejiang Province, had ditched large positions in rubber derivatives, reported the Wall Street Journal’s China Real Time Report.

Before long, the word was that regulators in in Beijing were investigating some illicit loans that were being used to fund the derivatives trade.

Rubber futures soon lost 4.7 percent – extremely close to the Shanghai Future Exchange’s daily limit of 5-percent movement in a contract.

Yet one issue remained – the rumor was just that, and nothing more. The China Securities Regulatory Commission (Beijing’s equivalent of the Securities and Exchange Commission) isn’t conducting an investigation into rubber derivatives or loans, and the exchange had no news of any inquiries.

Dadi Futures, reported China Real Time Report, said that "everything is normal."

Rubber futures recovered to end the day down 2.7 percent – but the incident illustrated just how fast trading sentiment in commodity futures and derivatives can shift. Firms involved in the international commodities trade can definitely benefit from derivatives risk management products.