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IB loses $28 million buying MF Global Stock
- Thread starter western
- Start date
Quote from def:
You need to differentiate between the different affiliates of IBG. IBLLC is the brokerage and would not be the entity making the investment.
Are they not part of the same holding company? If an affiliate of IBG makes a huge terrible bet and bankrupts the company, doesn't IBLLC also get taken down?
I don't understand why CFTC delayed the Financial Data for FCMs .
http://cftc.gov/MarketReports/FinancialDataforFCMs/index.htm
Something is wrong ...
http://cftc.gov/MarketReports/FinancialDataforFCMs/index.htm
Something is wrong ...
Yes, that's bad for IB and us customers but this quote is kind of reassuring (if you can ever trust what they say) that IB isn't gambling quite so much with customer's accounts.
âNever bend the rules,â Peterffy said about what he learned from the MF Global implosion. âYou bend the rules a little bit and then itâs a slippery slope.â
I bet he made the investment as a start to taking over the firm. It's not gambling but the start of negotiations to get complete control. In this case they realized MFG was finished and stepped away.
Corporations, Raiders, etc. do this all the time. It sounds like a business decision by the parent rather than a speculative bet.
Corporations, Raiders, etc. do this all the time. It sounds like a business decision by the parent rather than a speculative bet.
Quote from western:
Are they not part of the same holding company? If an affiliate of IBG makes a huge terrible bet and bankrupts the company, doesn't IBLLC also get taken down?
A huge bet? IB had a net capital balance of $1.3B as of August, according to the CFTC. I don't think a bet of 2% of net capital is a huge bet. What percentage of trading capital do you risk every day?
Newwurldmn has it correct. This has nothing do do with market making activities but rather was a strategic investment consistent with the proposed deal with MF Global that has been publicly reported. It's a nominal amount relative to firm capital and it's been publicly disclosed at the proper time as well as through the proper forum (10Q).
Quote from trendy:
A huge bet? IB had a net capital balance of $1.3B as of August, according to the CFTC. I don't think a bet of 2% of net capital is a huge bet. What percentage of trading capital do you risk every day?
When do you think the last time IB lost $28mil in a single day with their market making division? Their VAR is likely way lower than that.
I realize that 2% isn't a huge deal, but its something that IB should not have been doing in the first place.
If they wanted to buy MF Global, they should've approached the company with an offer(and thank god they didn't) like its normally done.
I don't want my money being intermingled with any "strategic investment" stock trades.
MF Global likely will not be the last broker to go bankrupt. I hope IB isn't buying all the way down to 0 next time.