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> Sort of makes you wonder why they need "uninsured loss reserves" as
> part of their technology development expenses...
Could it be that their insurance carrier has changed their risk assessment
of TS in light of the claim payout and that the new premium is such that TS
can't absorb it!! Wanna bet that the "uninsured loss reserves" are
understated maybe even critically so? I smell creative accounting.
I know that errors and omissions insurance in the investment industry was
unbelievably expensive for the coverage you got. The brokerage side of the
business has to be even worse. And the futures side of the brokerage
business, the worst of the lot because of the leverage. And I'll bet that
as a software development house, they had no idea of exactly how nasty if
could be.
All they saw was the feeding frenzy of the net-tech market and figured that
brokerage was a money machine. But they may have had no choice because of
the Russian hackers making TS available for pennies on the dollar. And the
net is tailor made for reaching a large audience.
> Maybe some of the bugs in TradeStation are finally "coming home to
> roost..."
I think that TS as a brokerage will be lucky to survive especially in this
market environment. If they'd been able to bring the brokerage product to
the market before the net-techs rolled over, they would have had incredible
cash flow from all the genius traders. Of course, with their track record,
they would probably have managed to use that cash flow the wrong way.
It's just a matter of time. TS will fail or be bought out and the product
fixed and improved. If they fail, then with a vacuum existing, we'll see
someone come with a new product. Either way, there will be a replacement.
Season's best,
Mike
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