Whats going on with Pension?

They closed at 1.20 same price as MF global before BK announcement.

I heard they use racetrack bonds as collateral.

Is there MF risks with Pension clearing?

 

I've heard a lot of chatter this week that the MF story would be devastating to smaller FCMs.... And well, they are right. If the regulators can't do a better job of guaranteeing the security of our assets, I for one wouldnt mess around with anything but the more "secure" firms.

I still clear with Vision, and they told me (in addition to themselves) they like Advantage, RCG, ADM... They are all competitors, but at least are respected aa doing things in the "old", conservative way. Penson is NOT in that category.

 

If I had assets with Penson it probably would be prudent to reduce your exposure. You dont want to wait till its on CNBC.

Look at the balance sheet.

 

im not taking any chances...went flat today and will be taking all my funds out soon as my close settles. Not worth it.

 

think I will pull too...

damn just sucks...

 

Penson pros:

Not run by Jon Corzine or people who associate with Jon Corzine.


Penson cons:

Undercapitalized relative to customer assests.

PNSN market capitalization of only $35 million (a fraction OF IB's quarterly profit).

Incompetent management.

Bad business model that can't show a profit.

Used by almost every bottom feeder discount stock broker as a clearing firm.

 

I pulled everything when they proudly announced to Wall St. that they were combining a couple of units to free up $30 mil of what used to be regulatory capital.

Translation: customer accounts $30M less secure - they needed that capital to keep operating . .

 

I have an account with MB Trading. They clear through Penson. If Penson fails, can't MB Trading just change clearing firms?

 

Sure, but you have to know what account type you have - is your money with Penson, or is it with MB in a sweep-back-&-forth type deal? If it's with Penson (most futures traders will be), then when MB changes clearing firms, you get left behind with Penson. If sweep, you probably go with MB . .

 

I cleared MF up until Friday and am considering opening an account with Advantage now. I like the fact that they don't have a prop desk, but in the end is that even an indication of safety? I'm debating doing this now or just waiting and seeing what happens here. Worried about Advantage's exposure to MF. Anyone have any input on the matter or who can comment on Advantage Futures in general?

thanks