Could TradeStation Futures Accounts be At Risk?

Discussion in 'Retail Brokers' started by Bear Plunger, Oct 27, 2008.

  1. Can someone delete this - I made a mistake and lost my typying when I hit re-fresh, and it doesn't let me delete.
  2. It meant to say - could ANY futures account be at risk - i don't even have a tradestation account but was thinking about opening one there.

    Futures accounts aren't insured right?
  3. Futures accounts are not insured.

    All futures brokers do not have the same level of risk.

    The biggest risk to a futures account comes from the other customers of the broker, not the broker itself. Thus brokers with poor risk management procedures are putting your account at risk.
  4. devil97


    this really worries me, I only have 5000 usd to start trading, and I like IB but I can´t afford their margins.

    I am opening my account in proactive futures and they offer 500 intraday margins, so is my account at risk in this kind of broker that offers this leverage?
  5. You are forgettting the most important "risk manager"... the exchange itself, which does a mark-to-market of all open positions twice (intra)daily. Combined with market "circuit-breakers" and limit price bands, it is extremely unlikely (although not impossible I'll admit) that customer accounts by themselves would cause major damage to the financials of an FCM. It is highly improbable a majority of all customers would be levered up on the wrong side of multiple markets between intraday MTM.
  6. I am not forgetting anything. Exchange risk management procedures only work under normal market conditions. When out of the ordinary happens exchanges have fallen down on the job.

    I guess that Evan Dooley's $141.5 million loss only caused minor damage to Mann Financial's finances.

    Historically almost every collapse of a futures FCM or clearing firm has been due to customers having a major blowup.

    Proper risk management procedures would never let a customer's position get outsized relative to the customer's capital or the firm's capital.
  7. MGJ


    The lesson of Refco and Sentinel is: your brokerage firm might break the law, and this might freeze or damage or destroy your account.

    The lesson of Lehman Brothers is: your brokerage firm might engage in unbelievably stupid activities, and this might freeze or damage or destroy your account.

    So be sure to choose a brokerage firm that won't break the law and won't act stupidly.
  8. You sure are a bitter and smug persona. dick

    fwiw... Dooley was an EMPLOYEE not a customer.

  9. Don't know what your problem is. I am just reporting the historic reality of firm failure in the futures markets, I am not the one who created that reality. It is not useful to anyone to underestimate all the risk aspects of having a futures account.

    Evan Dooley was a broker for Mann Financial and a customer.

    From the relevant MF Form 8-K filing:

    "MF Global Ltd. (the “Company”), a leading broker of exchange-traded futures and options, announced that during the early hours of Wednesday morning, February 27, a registered representative in one of its U.S. branch offices, trading in the wheat futures market in his personal account, substantially exceeded his authorized trading limit. The registered representative concerned has been terminated effective immediately. "