Warning signs before MF Global went under

Discussion in 'Retail Brokers' started by learner88, Jan 13, 2018.

  1. As a retail trader, the biggest nightmare is to have our broker going bankrupt and having our money disappear overnight.

    I got scared after reading this thread.
    https://www.elitetrader.com/et/threads/brokers-that-are-doing-badly.316996/

    MF Global was a big and respectable broker before it went under. What were some warnings that clients could have heeded before it went bankrupt?
     
  2. truetype

    truetype

    MF was run by a Democratic politician. Nothing wrong with redistributing the wealth a bit!
     
    patrickrooney likes this.
  3. SunTrader, comagnum and Lou Friedman like this.
  4. I don't remember which, but over the years various futures firms have gone bust (RefCo, MF Global, etc). If you were paying attention to the rumors on the Street, people knew it was coming towards the end. I heard about hedge funds frantically trying to wire they cash out or bring their account down to the minimum for trading just based on rumors (which sometimes were right, and sometimes not). I'm not sure how as a retail trader you would hear these things, however.
     
  5. KeLo

    KeLo

    Up until running for President, Donald Trump was a longtime New York City Democrat working within the old Democrat Tammany Hall system.

    [​IMG]

    P.S. But I do not claim that Republicans are the party of virtue. I know better than that. If there is a political party of virtue, they are meeting in someone's living room.
     
    Last edited: Jan 13, 2018
    comagnum likes this.
  6. If your broker is public-traded, you can always check its stock price.
     
    sprstpd and MoreLeverage like this.
  7. KeLo

    KeLo

    https://dealbook.nytimes.com/2012/03/27/mf-globals-shortfall-no-surprise-some-say/
     
  8. sprstpd

    sprstpd

    This. Or check its bonds or other market traded securities to see how they are doing (CDS maybe?).

    Here was MF Global's chart:

    [​IMG]

    I don't know if you could get your money out in time during the last plunge, but certainly you could have reduced some exposure to it as the price continued to fall from July to October.
     
    curiousGeorge8 likes this.
  9. Whatever you do, don't have an account with Tradestation. They are leveraged 24:1 and have been fined for capital deficiencies before, plus they are headquartered in Florida. They could be the next MF Global come next financial crisis. You only find out who is swimming naked when the tide goes out.
     
  10. Bobbybax

    Bobbybax

    There were warnings but if you withdrew money in the last 1 or 2 weeks, that money was confiscated by the trustee. I tried to take delivery of gold contracts but the trustee wouldn't let the gold be delivered. In the end customers were made whole but it was a scary journey.

    I use 3 clearers now.
     
    #10     Jan 13, 2018