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I just entered 20 buy orders on my screen and they went through just fine. Must be a setting you can change.

Or maybe because MF knew it could never get funds out of canadian custodial accounts because of firmer regulations. Bottom line, financial laws regarding customers accounts are too lax in the US.

Another article about how re-hypo caused MF failure. Interesting to note that canadian customers of MF have already gotten all their money back. Wonder why? Cause its illegal to re-hypo assets in that country...

Another article about how rehypothecation caused the MF global failure. It notes that MF global canada customers got ALL their money back within 10 days because its illegal to re-hypo assets in that country...

I am thankful that you and IB-AN have made in depth replies to the issues at hand and they have alleviated some of my concerns. But you and senior managment at IB should also be aware that the financial world is now different after the MF Global failure. Trust is gone and any firm that is not...

Who knows. If all the money was there as of Thursday, but suddenly gone Friday, you'd think it would be a simple matter of retracing whatever transactions occured on Friday. It may be a matter of conflicting motivations. MF's counterparties probably have a good sense of what happened, but...

Here is a key question. Lets say that a broker does re-hypo 140% of the assets and then for some reason the broker immediately declares bankrupcy. Now you have assets that theoretically part of a customer's account at another firm. Assuming all rules have been followed, are customer...

If my hypothesis above is true, it has very disturbing implications for the securities industry. It means that the missing customer funds at MF Global are NOT a result of active fraud or theft by MF executives, but rather an unintended side-effect of a perfectly legal mechanism that allows...

I found some very interesting data today. In this FT times article, the head of the CME states that auditors visited MF Global on Thursday, Oct 27th and found everything to be ok. Segregation of customer funds was "intact." However, on Friday, the very next day, the segregation report showed...

Trading is a profession where buying and reading the wrong book will likely cost someone alot of money so I would argue that the vast majority of trading books are not worth even a penny.

Here is a nice tidbit from a businessweek article today. "Asked whether the CFTC thought other futures merchants like MF Global could also face bankruptcy, Sommers said there is no “watch list” for potential failures. “I’m sure there are firms that may be close to the margins,”...

Some of us full time traders have balances that far exceed SIPC limits. Furthermore, the SIPC has operated in a manner that gives me no confidence it will even back up its promises. http://thehill.com/blogs/congress-blog/economy-a-budget/120483-sipc-has-fail

Thanks for replying Def. The margin lending you described appears to be standard hypothecation, which I am totally ok with. But it is re-hypothecation that I am concerned with. I found this definition on the web. "Re-hypothecation occurs when banks or broker-dealers re-use the collateral...

SIPC is NOT federal insurance. In any case it only covers 100k in cash and many full time traders have way more than that at IB.

IB has their timber hill market making division. Perhaps the $14.5bil in re-hypothecates is what IB uses to provide trading capital for that division.

I would like an IB rep on this board to explain exactly what it means that IB re-hypothecates $14.5 billion of customer funds, and what would happen if IB were to face a liquidity shortage that MF global did.

Page three of the agreement: "Interactive or its Affiliates may deposit collateral, securities and/or other Customer property with third parties and may pledge, re-pledge, hypothecate or re-hypothecate Customer collateral, securities and/or other Customer property, either separately or...

I think the only real way to ensure your funds is to either: 1. Use a broker that is part of a bank deemed too big to fail, Like Goldman, Bank of America, JP Morgan 2. Use a broker that does not engage in proprietary trading

Thanks for bringing this up. I was unaware prior to now that re-hypothecation even existed.

Could your blog have been any more generic? If you expect any sort of constructive feedback you need to provide something worth reading.