Sentinel Management Files for Chapter 11 Bankruptcy

[OldTrader]

Quote from osorico:

So you are saying IB requires no margin to hold a contract intraday? And drawdowns are actually SIPC insured? So IBs recent upping of margin requirements has no bearing on the trade. That would explain why there is no discernable difference between intraday and overnight margin at IB.

No, that's not what I'm saying at all. I'm saying that intraday IB doesn't move your margin into the futures account. This doesn't happen until the end of the day. So therefore, whatever margin you are using is in effect insured by SIPC, because it is all held in the securities account until the end of the day. What is not insured that particular day is your profit, because it will be shifted by the clearinghouse to IB and then to your account, where it will be transferred into your insured account.

If you're holding overnight positions your maximum exposure in a futures account is the minimum overnight margin.

If you were short an index contract Thursday night Im sure you would disagree with your statement. I'm sure there are few FCMs that could have used guaranteed loss protection too.

By "exposure" what I meant is "exposure" to the whole list of possible losses from being held in an unprotected type of account, such as a futures account. At IB the only funds exposed to potential risk of this type are your margin. Obviously you are always exposed to market risk.

When you understand how futures actually work, you will understand that sub exchange-minimum-INTRADAY-margins are a benefit to traders, not a detriment or financial burden to an FCM, or any account held at such FCM.

You would think that some of the recent events would have shut your piehole somewhat, but evidently there is literally no end to the stupidity that your dumbazz is going to post. The only benefit from ultralow intraday margins is that it allows any particular trader to literally margin the crap out of his account. That is not a benefit to anyone else trading at the firm, and in fact, may be a major drawback if the firms safety programs are ineffective or insufficient. Because this is one of the ways that your capital could be exposed to risk.

OldTrader

 

[OldTrader]

Quote from wareco:

You are also paying about $1.00 per RT more than me. I've saved enough in commissions over the last 2-3 years to fully fund a new account in the event my current account suddenly went to zero because the FCM blew up.

Hopefully you and Pabst have held your "savings" in a separate account so that you may fund your new account if it should become necessary. LOL.

On the other hand, you would think it might be important to you and Pabst to also protect all those profits you guys made in the 2-3 years....unless of course.....

OldTrader

 

[OldTrader]

Quote from sprstpd:

This implies that you can invest your funds directly in T-Bills at IB. Excuse my ignorance, but how do you do this?

No, I didn't imply this. You can buy T-Bills at IB, but in $1mm amounts. I would assume that rules out a few elitetraders.

OldTrader

 

[OldTrader]

Quote from john12:

i didn't think ib allowed one to hold t bills to trade stocks or futures against? even if they did 2 very important drawdowns. #1 it allows you to hold zero overnights against the tbills so you effectively are stuck day trading. #2 the tbil is still in street name and is not in your name so if ib goes under its counted as a security for sipc. people do treasuries inside a broker account to get the 500k sipc vs the 100k of cash protection

When I held T-Bills I held them in a futures account and used it for margin of futures positions. I wasn't referring to IB. It used to be that some firms allowed T-Bill purchase of $10K minimum, $5K increments. Don't know whether that is still the case or not.

OldTrader

 

[wareco]

Quote from OldTrader:

Hopefully you and Pabst have held your "savings" in a separate account so that you may fund your new account if it should become necessary. LOL.

On the other hand, you would think it might be important to you and Pabst to also protect all those profits you guys made in the 2-3 years....unless of course.....

OldTrader

OK, let me repeat. I keep the minimum amount I need to trade the max # of contracts I wish, and the rest of my money is in the bank.

 

[One]

OT,

I've held treasuries in futures accounts as well, but I suspect, and I may be wrong, that those t-bills provided no greater protection against losses or fraud than other instruments.

First, I never received a 1099 from the treasury for earnings on those t-bills, suggesting that the holdings were not directly in my name and may have been part of the overall segregated pool which of course is a portfolio of investments (FCM's aren't going to let money not needed for margin sit unused overnight) . Also, the broker was able to purchase and liquidate my treasury holdings whenever I called, so of course they could do so anytime they decided for fraudulent reasons or to add to the segregated pool.

I'd like to know the definitive treatment of t-bills in cases where pro rata losses are distributed to the normal segregated. pool.

 

[dandxg]

Quote from fseitun:

A few hrs ago I tried to wire out part of my funds from the VF online account.

Just moments ago I received an email from Velocity with the current subject:

Value date of your x,xxx.00 Euro wire out will be 08/21/2007...Thanks.


What does this mean?

That sounds good to me. It did not say all redemptions are suspended. I take it that maybe it takes a day longer since they are converting from USD to Euros? I don't know though.

 

[fseitun]

Quote from dandxg:

That sounds good to me. It did not say all redemptions are suspended. I take it that maybe it takes a day longer since they are converting from USD to Euros? I don't know though.

Not really because my account is split into a USD account and EURO account, which should make it immediate to wire out funds.

I have the feeling that they are starting to receive many wire out requests and it's in their interest to postpone withdrawals by a couple of days.

 

[john12]

one you're correct the treasury's you buy are in street name and not yours which is no different than a money market threw a broker. it has to be instreet name so the broker can liquidate on a margin call which means no more secure than a money market inside a brokerage account. the only reason anyone does in a regular brokerage account is to get the extra sipc coverage of a stock vs cash. i'm sure you did inside a futures account to get interest on your idle nightly cash vs getting zero interest that most futures brokers pay

 

[fseitun]

Quote from dandxg:

That sounds good to me. It did not say all redemptions are suspended. I take it that maybe it takes a day longer since they are converting from USD to Euros? I don't know though.

Not really because my account is split into a USD account and EURO account, which should make it immediate to wire out funds.

I have the feeling that they are starting to receive many wire out requests and it's in their interest to postpone withdrawals by a couple of days.