At what point do you millionaires split up your funds and manage different brokerage accounts?

[Maverick2608]

So first issue, SIPC insurance limits, is relatively easy. Just buy Treasuries in your name, you take a 5% haircut on buying power, and if they go under you just retrieve your Treasury and move on in a matter of days. On the margin rates, just sell a wide SPX box to get better lending rates than any broker, and you can do it at any broker.

Are you sure you can buy treasuries in your own name in a margin account at most brokers?

 

[Sig]

Are you sure you can buy treasuries in your own name in a margin account at most brokers?

I guess I only care that I can do it at my broker, now that you ask I would be surprised if there are any brokers who wouldn't let you do it. It's a common strategy for exactly that reason and some entities are required by their bylaws to either do that or have insurance coverage that would actually cover 100% of their loss which as you all did a good job of pointing out none of the current products do given the aggregate loss limit.

 

[dozu888]

So first issue, SIPC insurance limits, is relatively easy. Just buy Treasuries in your name, you take a 5% haircut on buying power, and if they go under you just retrieve your Treasury and move on in a matter of days. On the margin rates, just sell a wide SPX box to get better lending rates than any broker, and you can do it at any broker.

how is this gonna work.... say you have an account with $1m in stocks, you buy treasuries on margin?

 

[comagnum]

What is your impression of stock borrow rates across brokers? Is there wide disparity or do borrow rates reflect a common market borrow rate?

I am not the best person to answer this since I don't do major in shorting. Since I have PM with IB I have been using them as me go to for shorting these days.

Never noticed a wide disparity between brokers with the borrow rates.

 

[ETJ]

Can be a significant disparity in short rebate rates depending a lot as to if the position is in their "box" or do they have to do a locate. You can see the "market" rate by backsolving the option parity equation - but parity could be a band if it's HTB, but you'd still have a sense. Some slightly better rates if the custodian has an ongoing relationship with you.
If Schwab/TD becomes a reality they are going to have a "size" box for lending.

 

[ironchef]

Just pick any two brokers that are "too big to fail" and you should be diversified enough at any net worth level. However, they do treat you a little different when your account exceeds $1M, give you a special # to call when you need help even when you are self directed.

 

[dozu888]

Just pick any two brokers that are "too big to fail" and you should be diversified enough at any net worth level. However, they do treat you a little different when your account exceeds $1M, give you a special # to call when you need help even when you are self directed.

The current big 5 are all tbtf.

 

[ETJ]

As was Lehman under a Republican administration.

 

[GregorySG9]

However, they do treat you a little different when your account exceeds $1M, give you a special # to call when you need help even when you are self directed.

IB must be an exception. They still treat me like shit haha