Any reason to worry about our own broker?

H

HotTip

I trade with IB, and although I know (or at least think I know) that IB isn't running any hedge funds with levered exposure to subprime debt and that customer accounts are insured by Lloyds of London, is there any reason whatsoever that I should be worried about my brokerage account there? Is there any risk that there will be a "run on the bank" as with BSC?

I'm just being paranoid, but I can't help but ask. :)
 
Quote from HotTip:

I trade with IB, and although I know (or at least think I know) that IB isn't running any hedge funds with levered exposure to subprime debt and that customer accounts are insured by Lloyds of London, is there any reason whatsoever that I should be worried about my brokerage account there? Is there any risk that there will be a "run on the bank" as with BSC?

I'm just being paranoid, but I can't help but ask. :)
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a darn good point, that is what I have been thibking, I have my account at TS and I am worried as hell, Lyonds of London, who gives a fck anymore, if BSC could fall like that, I trust no one and no insurance except for coins of gold under the mattress...
 
I think the difference is that BSC actually made bets on the market with their own capital as well as with their wealth management clientelle capital. Whereas, I hope, IB is merely a custodian of client funds with no ability to actually trade. I'm hoping that IB doesn't have a proprietary trading desk, or if they do, they're not a bunch of cowboys playing with leverage.
 
Hottip, I have to correct you on this.

If you read the IPO prospectus, the earnings reports, and research IBKR , you will find out that IB makes most of the profit from trading. They are a market maker. They developed the software what you are using first for their own trading.
 
Quote from HotTip:

I trade with IB, and although I know (or at least think I know) that IB isn't running any hedge funds with levered exposure to subprime debt and that customer accounts are insured by Lloyds of London, is there any reason whatsoever that I should be worried about my brokerage account there? Is there any risk that there will be a "run on the bank" as with BSC?

I'm just being paranoid, but I can't help but ask. :)
More...

You never know. Anything can happen. But im not worried, yet!

For us outsiders the only thing we can look at is the IB share price, if its starts to collapse faster than other finanical stocks or even the S&P 500, then it might be time to start worrying.

At the moment it is holding up well compared to the rest of the market (S&P 500) and way better than alot of other financial stocks.
 
Quote from HotTip:

I trade with IB, and although I know (or at least think I know) that IB isn't running any hedge funds with levered exposure to subprime debt and that customer accounts are insured by Lloyds of London, is there any reason whatsoever that I should be worried about my brokerage account there? Is there any risk that there will be a "run on the bank" as with BSC?

I'm just being paranoid, but I can't help but ask. :)
More...
I was wondering about this too and posted this message earlier:
"BTW, FWIW I just put in a request to withdraw $1,000 from my IB account. No big deal right? Well usually it says under status, "Pending". But today it says "Request Under Review". Ha. Maybe IB is worried about a run on their accounts too. Hmmm. Not sure how our money is backed up there. I guess it's insured by the SIPC. Is that right?"

But now the pending withdrawal has been changed to "Processing". Not sure that's different. Ha. :) Hopefully we're okay.

I just vaguely remember what happened at Revco which everyone thought was one of the more solid futures firms. Anyone have a link to this info on Revco? Wasn't Jim Rogers involved somehow?
 
No one knows, anything can happen when you are trading. However, i do not think thats a company where people will run for the bank. I would look more at Legg Mason and such....
 
Quote from BCE:

I was wondering about this too and posted this message earlier:
"BTW, FWIW I just put in a request to withdraw $1,000 from my IB account. No big deal right? Well usually it says under status, "Pending". But today it says "Request Under Review". Ha. Maybe IB is worried about a run on their accounts too. Hmmm. Not sure how our money is backed up there. I guess it's insured by the SIPC. Is that right?"

But now the pending withdrawal has been changed to "Processing". Not sure that's different. Ha. :) Hopefully we're okay.

I just vaguely remember what happened at Revco which everyone thought was one of the more solid futures firms. Anyone have a link to this info on Revco? Wasn't Jim Rogers involved somehow?
More...


everytime I take money out from IB I got "pending" and then "request under review" and then money shows up in my bank account. I think this is the normal process. I think "Pending" is actually means "pending" for review. It has always been like that. What you experience may suggest IB has skipped the "pending" process which actually mean faster processing.
 
I am paranoid, too. A while ago I sent an email to IB about the security of IB accounts, I did not get any meaningful answer except for a few links.
 
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