Traders work in a booth on the floor of the New York Stock Exchange, Monday, Aug. 24, 2015. U.S. investors woke up to a serious jolt Monday when the Dow Jones industrial average tumbled 1,000 points minutes after the market opened in a wave of selling that circled the globe after a historic plunge in Chinese stocks. (AP Photo/Richard Drew)

Until recently, advisors rarely heard about problems involved in trading Exchange Traded Funds in volatile markets. Then came the chaos of the stock market’s open on August 24.

During the first hour of trading that day, prices of some popular ETFs fell by more than 30 percent–five times the 6 percent decline in the S&P 500 Index. Trading-halt circuit-breakers were implemented on ETFs more than 600 times, leaving many sell orders temporarily unfillable. In fact, half of the 1,200 total circuit-breakers triggered in all securities that day were in ETFs.

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