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Eric,
Your post about the firm not offsetting positions is accurate. If a firm
always had postitions to hedge against their clients net position, they
could go under if the clients did very well! A client's losing position
is the client's liability - thus the reason for any margin requirements
in the first place. Instututional traders for firms who know their
clients trading patterns well may accumulate a postion in the house
account and then offer it to their client - but that becomes the firm's
liability if and until the client accepts the trade.
Rob:)
Eric wrote:
>
> Hey RTers,
>
> I have been having a discussion off group about the Niederhoffer
> situation and a response I received was that Refco had offsetting
> position for their house account and the statement below was made.
> I believe this to be totally false (clearing firms do not take
> offsetting positions in the futures markets, they simply monitor the
> customers ability to pay for losses), but I wanted your confirmation as
> back up.
>
> Eric
>
> JER3CUBE wrote:
> >
> >
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