To me the central point is why anyone would keep money at a firm that could well be on life support any moment now. BTW ... I think the regulators have known about the problems at Penson for so long that it is unlikely that the segregated accounts will be a problem. I also think they already know who will take over the retail accounts. That said, why would I want to hit the desk at 7 AM and not be able to trade that day and maybe even for a few days? Again I ask: Where is the well reasoned argument that there is an upside to keeping thousands of dollars there and maybe open positions? Scratch that last paragraph. How about a somewhat less than well reasoned argument? Or how about any argument that is not pure nonsense?
We are able to offer our clients a good transactional model with reasonable risk assumptions, for account under $5MM, which NO other firm will do. We have had clients say, "I don't want Penson", then have an issue at another firm, and open an account with Penson and are happy there. Other firms have higher minimums, restrictions on routing, demanding margin call requirements and higher the OCC TIMS risk calculation for position that are not overly risky. This decision is not that cut and dry when your tiring to run a business. Bob
For a strictly futures account better than Vision or Crossland? I would throw in both AMP and Velocity but both are lightly capitalized.
Futures is not the issue. Anyone can get leverage with futures and open small accounts. I'm talking about CPM accounts. Leveraged equity and option accounts. Most Prime Brokers don't offer CPM, and the ones that do, don't want to bother with accounts under $5MM because they require more work and regulatory over site.
We were not discussing rates. This discussion was about why use Penson? You can receive competitive rates at many firms for appropriate volume. Rates are only one factor. We are also Introducing Brokers to Interactive Brokers. Their risk premium is higher in many ways than Penson. If you require leverage, Penson offers more. Some will comment here that more leverage is more dangerous. Sometime yes, sometime no. The fact is that if your business requires it, Penson offer more. Remember, the Introducing Broker relationship places us next in line for losses on our clients accounts, before Peson, if our client blow through their assets. So, we do care about risk. Bob
So we are not discussing futures and we are not discussing rates. I hope you will understand my reluctance to continue an exchange that revolves around not discussing things that matter to me. I don't mind you plugging your firm but for God's sake figure out a way to do it effectively. This is pathetic.
It was not my intention to defend Penson or my firm, just provide information. In this thread, the question was why do traders and broker dealers do business with a firm who's stock is preforming poorly? I'm telling you there are over 320 Correspondents with thousands of accounts that rely on Penson for their business that can't be replaced at other Prime Brokers. I'm not judging Penson, the participants here that won't do business with them or the ones that will. I'm offering information that traders on the outside might not understand.
Some more facts from their last quarter earning report..(Which was a large loss) "Penson Financial Services, Inc., the Companyâs US subsidiary and its largest, ended the third quarter with a total of $185 million of net capital, more than five times the minimum requirement. It also reduced short term financing by $750 million, paying down all short term bank debt. Penson Worldwide ended the quarter with $55.8 million of nonsegregated cash."