A risk control system can become a source of risk. That sounds contradictory. History says otherwise. Before the 1987 crash, portfolio insurance used computer models to reduce equity exposure as markets fell, often by selling stock-index futures. The logic was straightforward Market falls → sell futures → reduce exposure → protect the portfolio. But when many institutions followed similar rules during the same decline, those trades could add selling pressure to an already falling market. The Federal Reserve later noted that portfolio insurance may have contributed to a feedback loop, while also emphasizing that it was not the only cause of the crash. That distinction matters. A strategy can be sensible for one participant… yet produce very different consequences when thousands of participants respond to the same signal. This is a risk traders often overlook Your strategy does not operate in isolation. Other traders have models. Funds have mandates. Risk systems have thresholds. Margin rules can force decisions. And when enough participants react to the same condition at the same time, their individual decisions can become part of the market’s behavior. The market is not just a collection of strategies. It is a system of interacting strategies. That is where individual risk can become systemic risk.