MF Global Files for Bankruptcy, Now What?
Oct 31, 2011
The financial industry has seen a lot of changes in the last few years. The most recent is MF Global, one of the world’s leading futures clearing members (FCM) filing for bankruptcy. Producers with accounts at MF Global are now left with a decision, should I wait out the storm or take decisive action to manage risk?
Open positions at MF Global will either need to be liquidated or transferred to a new introducing broker (IB). This is not the forced liquidation that the market feared, but the ramifications will still be felt by many producers. As of this writing, producers that trade through MF Global IB’s are unable to add new positions. Considering the volatility we have seen in the grain markets, it is not advisable to stand flat footed and wait for the dust to settle. We recommend being proactive during this time of crisis and gaining some access to the market. We are NOT encouraging you to sever ties to the many MF Global brokers that have been caught in the fray, but having a plan in the interim is critical.
With harvest about 78% complete nationwide, most producers still have un-priced bushels. If you feel that existing positions are not sufficient to cover downside risk, give our brokers a call and we can help you navigate the waters until the dust settles.
THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
PLEASE READ OUR RISK DISCLOSURE.