CME should say they are going to make every customer of mfg whole and pay for this by levying a 10c fee on every futures and options contract traded. On the 23rd, probably a slow day, they traded 4,450,307 contracts. Divide by ten we get $445,030 divide into $1.2bn- $550m already pledged equals 1460 days or 5.84 years. Problem solved. I will gladly pay to keep the market liquid.
OK with the principle. I would pay an extra 10c for some times to make my fellow traders whole( much more than a government spending FTT ), but there are other people who needs to pay before us : Corzine and all the faulty MFG Employees, all the MFG creditors and counterparts who received money when it was about to collapse( JP Morgan...) and only then we should divide the remaining burden between CME, CFTC and futures users( with a modest fee increase ).
The CME should simply buy insurance and cover the risk. Then they should lower the obscene exchange fees. Then they should, like every other fixed cost business in the world, charge less per contract when I do a 10 lot then when I trade a single contract. No one bends you over like these guys. The anti-trust division of the Department of Justice should have been all over these guys 40 years ago.
They do it, but only for people with full memberships. Members already have attractive fees but when they do volume they pay next to nothing. However, you are right, retail CME fees are really prohibitive.
I am Not responsible for MFG losses and resent the idea I should have to pay Anything to cover the costs of the incompetencies of the CME, CFTC, NFA yet again, another financial fiasco - MFG reveals a whole nest of vipers connected with how 'brokers' have taken over the regulations, as well as the inadaquacies of the bankruptcy act where others can claim assets before account holders Canada's broker insurance has existed since 1969, covers all types of brokers is opt-in, current coverage up to $1M, and obviously it's criminal the US doesn't have insurance to cover futures and forex brokers losses I'm willing to pay an add-on amount to rt to my broker to pay for insurance, but I'd also want to see the figures for the cost of coverage etc stock brokers currently pay 1/4 of 1% of net operating revenues annually, the min $150 amount was dropped, so the SIPC coverage is a very low cost the problem is if the insurance is government or commercial since it would take quite a while to build a fund sufficient to cover all the MFG client accounts I'd also require anyone - Madoff, CTAs, hedge funds etc to have client funds insurance
I think they were diverted--along with the rest of the DoJ--to some sort of gun-and-drug running ops in Mexico.
+1. Without the above steps it would be just another public funded bailout like all the other bank bailouts we have done so far. And lets hope they actually create a third party trust fund with insurance much like the insurance we currently have for equity accounts. That would be one good thing if it comes out of this situation. -gariki