mf global - will it play out like opes prime?

When Opes Prime folded, ANZ closed out positions on market...

In many cases, the selling was conducted in a fire-sale like manner, often pushing the prices of targeted stocks considerably lower due to the significant and often hastily conducted (unecessarily forced), selling pressure.

Those who bought at the somewhat temporary low prices, generally made good money in the period that followed.

I assume, if the worst eventuates here, we may see a similar scenario unwind...but in what direction...ie, long or short?

I notice MF Global are one of the top 3-4 CFD providers on in market, with something like 5-8% of market share notated as "MF Global" for CFD products...but is this really all?

Interestingly, both Etrade and Comsec also list as major players in the CFD market, at levels just below MF Global's.

But...both Etrade and Comsec (two of the largest retail traders), use MF Global as their CFD provider.

Can we assume therefore that MF Global's actual market share also includes Etrade and Comsec's share of the CFD market?

Who else in the list is also using MF Global as a CFD provider?

The impact on the market may well be much larger than many expect.

The next then might be...were these accounts collectively long or short our market?

This is a little difficult to work out...but we can perhaps get a feel for individual stocks...some of which have been clearly targeted for short selling...and some for long positions.

There may be a trading opportunity here...simply go the opposite to MF Global's exposure in a stock (ie, long or short)...on the basis that at some point in the not too distant future, the unwinding of their client's portfolios may well generate large short-term moves in certain stocks.

Find a stock that has been heavily shorted...and/or manipulated in support thereof...and you may find an opportunity to take a position prior to an influx of "fire sale" type buying on the back of short CFD's being closed out.

Same of course on the other side of the ledger...find a stock that is very long on the back of CFD's...and sell down in expectation of selling from the closing out of these positions.

It might all come down to exactly how big this exposure really is.

By the way...a withdrawal of cash from my MF Global CFD account yesterday did not transpire...seems the accounts are frozen!

Good luck all.

Cheers!