while many of your posts are quite erudite and educational, the above statement is simply, how should i say it, RIDICULOUS and makes absolutely no sense.
low margin requirements have no relation to a firms risk control.
sincerely,
surfer
Refco Fallout
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while many of your posts are quite erudite and educational, the above statement is simply, how should i say it, RIDICULOUS and makes absolutely no sense.
low margin requirements have no relation to a firms risk control.
sincerely,
surfer
Good luck to all RefcoFX account holders, very important week coming up. Hopefully we will be with FXCM by the end of the week. 
marketsurfer,
Your statement is wrong. $500 for ES is OK. How about $250 or $100? Is it still OK? Just imagine that there are no requirements at all for some period of time. It will obviously put a broker on the edge. Now, imagine that a broker requires full margin all the time. The risk will not disappear. It will be very small of course. Lower requirements do mean more risk. It is quite obvious.
Your statement is wrong. $500 for ES is OK. How about $250 or $100? Is it still OK? Just imagine that there are no requirements at all for some period of time. It will obviously put a broker on the edge. Now, imagine that a broker requires full margin all the time. The risk will not disappear. It will be very small of course. Lower requirements do mean more risk. It is quite obvious.
You live in a perfect world I donât. He is not wrong and a lot of traders have high leverage but I digress. So how does low margin requirements effect firms risk control department in a negative way. I thought in theory they sell you out when youâre close to going negative. So low margin if anything should make them more experienced and less gun-shy to do what has to be done. Come on grow up how many Clients would a broker have if you had to have full margin. Wonât your commission be higher because of less transactions and clients? A smart trader would not leave a lot of capital in his account knowing he gets great leverage with a small amount and limit the risk of losing a lot of money if company has a problem.
Good point.....I don't think the low margin requirments of RefcoFX dragged them down. Any positions open in my account, without stops, would get closed when I ran out of unused margin.
Example: $500 in account at 200:1 leverage.
* 10k position would be closed with a 450 pip move against me, including the spread. $50.00 account balance remaining.
* 50k position would be closed with a 50 pip move against me, including the spread. $250.00 account balance remaining.
* 90k position would be closed with a 5 pip move against me, including the spread. $455.00 account balance remaining.
So any bad trades I make gets closed rather quickly.
def
Sponsor
that's assuming no market gap. That is where the risk lies. obviously a firm or a few firms had some very large losses they were unable to cover since w/o the losses there would have been no bad debt to hide.
There are two issues here:
1. low margin
2. poor risk management
a firm can have great risk management and offer low margin and a firm can have horrible risk management and have high margin requirements.
however, the lower the margin required increases the level of risk.
The firm's willingness to assume risk comes in many forms including margin limits, client strategies employed, markets and products allowed, % of open interest, clients financial position etc.
Risk managment truly is an art form unto itself when you think about it.
Some of the brightest minds in the financial world have seen dominos fall which they never even considered within their risk management strategies.
Caveat Emptor.
Just thought I would quote your statements of 11/1:
Here's a link to the post:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=57333&perpage=6&pagenumber=16
Seems pretty clear what you said.
OldTrader
Old trader, your posting makes no sense to me. You quoted two of my postings. I see no contradiction between the two posts. I see nothing to support Apex Capital's claims that there was a contradiction.
But your commentary seems to suggest that there was a contradiction. If that is your meaning, then I reject it. I don't think you were paying very close attention.
I would also suggest that this type of debate is off-topic and damages the quality of our discussion about Refco Fallout. I think that even if your point were true, it would still contribute absolutely nothing, whatsoever, of any value to this discussion, and would only distract and subtract from it. I think it would be helpful if you could discuss the evidence as to what Refco really did, or did not do, to Jim Rogers. You contribute absolutely nothing by arguing about what I did.
Apex Capital has a long history of disrupting Refco threads, and other ET discussions, by making off-topic and false personal attacks. Apex Capital previously used the alias "waggie945", to subject ET members to a barrage of abusive, anti-social, and threatening behaviour. AAAinthebeltway complained that waggie945 was "one of the most aggressive, antagonistic posters ever since he joined, and he has contributed very little other than in chitchat." Baron finally banned waggie945 in June 2004. Apex Capital then chose his current alias, and has continued his agenda of abuse and disruption, and has done so most recently while acting as a Refco henchman. Your post not only promotes his agenda, it also threatens to provoke a revival of his efforts to disrupt Refco threads. His interference with this particular thread has mysteriously disappeared, so that in just a few days, the quality of discussion has greatly improved. Do you want this thread to go backwards? Why waste time promoting Apex Capital's agenda? Why not instead give us some worthwile information about Jim Rogers, or Refco, or protecting account security?
I challenge you to post something useful and relevant. Can you do it? Are you capable?
But your commentary seems to suggest that there was a contradiction. If that is your meaning, then I reject it. I don't think you were paying very close attention.
I would also suggest that this type of debate is off-topic and damages the quality of our discussion about Refco Fallout. I think that even if your point were true, it would still contribute absolutely nothing, whatsoever, of any value to this discussion, and would only distract and subtract from it. I think it would be helpful if you could discuss the evidence as to what Refco really did, or did not do, to Jim Rogers. You contribute absolutely nothing by arguing about what I did.
Apex Capital has a long history of disrupting Refco threads, and other ET discussions, by making off-topic and false personal attacks. Apex Capital previously used the alias "waggie945", to subject ET members to a barrage of abusive, anti-social, and threatening behaviour. AAAinthebeltway complained that waggie945 was "one of the most aggressive, antagonistic posters ever since he joined, and he has contributed very little other than in chitchat." Baron finally banned waggie945 in June 2004. Apex Capital then chose his current alias, and has continued his agenda of abuse and disruption, and has done so most recently while acting as a Refco henchman. Your post not only promotes his agenda, it also threatens to provoke a revival of his efforts to disrupt Refco threads. His interference with this particular thread has mysteriously disappeared, so that in just a few days, the quality of discussion has greatly improved. Do you want this thread to go backwards? Why waste time promoting Apex Capital's agenda? Why not instead give us some worthwile information about Jim Rogers, or Refco, or protecting account security?
I challenge you to post something useful and relevant. Can you do it? Are you capable?
In backup to jimrockfords point about them having much more rigorous risk control than most others then there is nothing in that to indicate they offer any greater risk control then say, erm, ironically REFCO....
or Man, or Barclays, or fimat, or countless other brokers I can mention. This is not to say that IB isn't a great broker for you.
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